Credit Suisse shares slip as market volatility causes Q3 earnings miss

Credit Suisse shares are lower Monday, as the Swiss bank missed third quarter earnings expectations, despite posting a 74% increase.

Credit Suisse shares slip as market volatility causes Q3 earnings miss

Credit Suisse shares are lower Thursday, as the Swiss bank reported earnings that came in below expectations as excessive volatility in emerging markets weighed. However, despite the “challenging” summer, the business is improving and further profit is forecast amid the tough global backdrop.

By 1445 BST, Credit Suisse shares were 2.50% lower at CHF12.89. The stock has been trending broadly lower in recent weeks, with mild signs of improvement earlier this week.

Credit Suisse Q3 results

Earlier Thursday, Credit Suisse said net earnings hit CHF424 million in the third quarter, a 74% increase from the same period a year earlier. However, despite the strong gain, it was below market expectations for a figure closer to CHF450 million.

The Swiss bank’s inability to achieve that market forecast came as extreme volatility in the emerging markets between July and September, proved detrimental.

Other earnings details were:

  • Q3 net revenues of CHF4.8 billion, just below CHF4.9 billion a year earlier.
  • CHF4.1 billion Q3 operating expenses, down from CHF4.5 billion in Q3 2017.
  • A new record Wealth Management AuM of CHF785 billion, a 4% gain from a year earlier.
  • Total AuM of CHF1.4 trillion by Q3-end, an increase of 5% from the same period in 2017.

“The third quarter, with much more challenging conditions and lower levels of client activity, allowed us to demonstrate the resilience of our new operating model as we delivered our best third quarter of adjusted* profit since 2014,” said Credit Suisse CEO, Tidjane Thiam.

Speaking to CNBC, Thiam said: “I can tell you in a quarter like this, the old Credit Suisse would have lost hundreds of millions…Today we are making a profit.”

Outlook

While the bank’s third quarter profit showed resilience, while still managing to disappoint the markets, Thiam said that looking ahead, he expects further profit improvements in areas that are directly within their direct control, rather than subject to market swings.

“The outlook for global economic growth in the final quarter of 2018 remains positive, despite continued geopolitical tensions surrounding global trade and the potential impact of monetary policy changes by central banks,” Credit Suisse said in its earnings press release.

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