Credit Suisse boosted by exceptional first quarter gains

[ZURICH] Credit Suisse, Switzerland's second-biggest bank, recorded strong first-quarter profits on Thursday thanks to exceptional gains linked to the transfer of a funds platform.

Its net profit jumped 75 per cent on the same period in 2019, to 1.3 billion Swiss francs (S$1.9 billion) - the bank's highest quarterly result in the last five years, the bank said in a statement.

The bank meanwhile built up reserves of one billion francs during the quarter to cope with the economic upheavals of the coronavirus crisis and said further reserve build could take place in the coming quarters.

"Our wealth management-focused business model proved to be resilient once more, while allowing us to leverage our investment banking capabilities for our clients in a period of high volatility," said chief executive Thomas Gottstein.

He took over the role in February following the ousting of Tidjane Thiam over a massive spying scandal.

The scandal broke last September, with the discovery that surveillance had been ordered on Iqbal Khan, a star banker and former wealth management chief who jumped ship to competitor UBS.

An initial investigation blamed former chief operating officer Pierre-Olivier Boueeober, but found no indication the rest of the top brass, including Thiam, were involved in or even aware of the spying activities.

Mr Thiam was forced to resign in February, but walked away with nearly US$11 million in pay and bonuses.

The gain on the transfer of the InvestLab platform to the Spanish group AllFunds, which specialises in the distribution of institutional funds, amounted to 268 million francs, boosting Credit Suisse's results during a turbulent quarter.

Its net revenues were up seven per cent to 5.8 billion Swiss francs.

Credit Suisse has taken part in Switzerland's bridging loan plan to see businesses through the Covid-19 pandemic.

So far, the bank has granted about 14,000 loans worth a total 2.4 billion francs.

It said that despite the scale of the economic impact of the pandemic, "we can maintain a resilient financial performance through this crisis".

Some 90 per cent of its staff have been working from home during the crisis.

AFP