Credit Suisse reports 2.3bn dollars profit in 3rd quarter (Roundup)

Oct 22, 2009, 14:48 GMT

Geneva - Credit Suisse Group reported Thursday 2.4 billion Swiss francs (2.3 billion dollars) in net income in the third quarter, topping expectations.

However, some investors expressed worries that some profits were from lower costs and not enough money was made from trading.

'The concern is the trading business, fixed income and equities,' said Teresa Nielsen, an analyst at Zurich-based Vontobel, noting what was seen as an 'under-performance.'

On the Zurich exchange, Credit Suisse stock took a tumble and in late afternoon trading was priced at 57.55 francs, down just over 4 per cent over the day.

At the investment bank, income before taxes reached 1.74 billion francs, up from the previous quarter, and was the driving force behind the better than expected profits.

In a note, Peter Thorne, an analyst at Helvea, said that while the investment bank performed well, it remained to be seen how good the margins would be once competitors fully rejoined the market.

Also, Credit Suisse said its tier 1 capital ratio, a regulatory measure of financial health, was at 16.4 per cent, a high ratio.

Nielsen said the bank was 'very well capitalized.'

Total net new assets were 16.7 billion francs in the quarter to the end of September. Assets under management moved up 4.6 per cent from the second quarter to 902 billion francs.

Credit Suisse is the largest bank by market capitalization in Switzerland. Unlike its rival UBS, which is the largest Swiss bank by assets, Credit Suisse survived the worst of the financial crisis to date without government assistance.

Analysts noted that expectations for the bank have risen in recent months.

Credit Suisse said that 'while client activity has picked up in selected areas, risk appetite has improved only moderately.'

The bank is seen as foreshadowing possible regulatory moves, including the high tier 1 capital ratio as well as its recently announced restructured payment system, which will award high pay and bonuses only over a longer period and not for short-term performances.