By
Chimamanda U. Martha
December 15th, 2023
Capital Markets Firm Credit Suisse Group AG has released its performance for the third quarter of 2020 in which its net income was reportedly below the expectations analysts placed on the firm.
Per the earnings reported, the net income for the quarter came in at 546 million Swiss francs (approximately US$600 million). This figure came in below the 679 million Swiss francs that analysts had forecasted, according to Reuters Eikon.
Wall Street firms continue to roll out their earnings for the previous quarter and while many some show signs of recovery following the pangs of the coronavirus pandemic particularly in the second quarter of the year, others still maintain a cap loss in their net revenues, the latest of which is Credit Suisse Group AG (SWX: CSGN). The 546 million Swiss Francs net income represents a 38% drop in the company’s net income for the same period in 2019.
The Pre-Tax Income (PTI) for the company for the third quarter came in at 803 million Swiss Francs, down 30% year on year. Credit Suisse also reported a 2% decline in its net revenues at 5.2 billion Swiss Francs against the reported 5.3 billion Swiss Francs for the same time last year. The total operating expenses surged by 5% to 4.3 billion Swiss Francs, while the pre-tax income for the first nine months of 2020 came in at 3.6 billion Swiss Francs, up 1% year on year, and net income attributable to shareholders was CHF 3 billion, up 18%.
Thomas Gottstein, CEO of Credit Suisse, said in a statement:
“Despite the Covid-19 pandemic and significant foreign exchange headwinds due to the strong Swiss franc, our performance in the first nine months of this year has been strong.”
Credit Suisse shares on the New York Stock Exchange (NYSE) closed 4.06% lower on Wednesday to US$9.92.
Credit Suisse to Pay Out Dividends Following Its Latest Earnings Release
As revealed by Credit Suisse, it will proceed to pay out the second tranche of the 2019 dividends to its shareholders following this earnings release, drawing strength from both its Wealth Management Business as well as its Investment Banking Businesses. Per the report, the total Wealth Management net revenues for the third quarter came in at 2.3 billion Swiss Francs, a 10% drop from the year-ago period. Nonetheless, the Wealth Management Business arm witnessed strong transaction-based revenues, which are up 18%.
The company’s global investment banking revenues of USD 2.4 billion were up 12% year on year. “We would expect this environment to continue to result in elevated levels of transactional and trading activity, across both our wealth management and investment banking businesses, as our clients respond to the macroeconomic uncertainties,” Credit Suisse revealed in a statement.
Following the earnings report, Credit Suisse aims to continue to provide its clients the needed support as everyone strives to recover from the longer-term effects of the COVID-19 pandemic.