C Suisse to trim parts of investment bank, CEO regrets

Pair Of Scissors

It ain't over yet.

The Financial Times reports that Credit Suisse said that it would exit its subscale commodities trading business and further trim other parts of its investment bank, after posting a US$780m net loss in the second quarter.

The loss, which compared with a profit of US$1.17bn a year ago, was mainly due to a US$1.78bn charge that the Swiss bank took to fund a $2.6bn settlement with US authorities, after admitting in May that it had helped clients evade taxes.

Credit Suisse said that it would also make further cuts to its rates business, and 'refocus' its foreign exchange operations to concentrate on 'a combination of electronic trading and voice offering for larger and more complex trades'.

Bloomberg reports that wealth management posted a 8.4% decline in pretax profit to US$633m, while attracting US$8.24bn in net new money.

Earnings from corporate and institutional clients and in asset management fell 19% to US$234m and 23% percent to US$113.5m, respectively.

Brady Dougan, CEO, said: 'Our reported results for the second quarter and the first half of 2014 were impacted by the resolution of our most significant legacy litigation issue. During the quarter, we continued to see good momentum with clients, while at the same time making further progress in winding-down our non-strategic units. Our strategic results were solid, demonstrating the resilience of our business model, notwithstanding subdued client trading activity in certain areas which impacted both Private Banking & Wealth Management and Investment Banking'.

He continued: 'With the final settlement of all outstanding US cross-border matters as announced in May, we brought to a close the most significant and longstanding litigation issue for Credit Suisse. I want to reiterate that we deeply regret the past misconduct that led to this settlement and that we take full responsibility for it. The continued trust and support of our clients helped us mitigate the impact of the settlement on our business'.

Credit Suisse exits commodities trading, trims investment bank

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