Credit Suisse Turns 2Q Profit
Within investment baking, income before taxes was CHF 281 million, compared with a record CHF 2.5 billion in the second quarter of 2007.
July 24, 2008
Reversing a first-quarter loss, Credit Suisse Thursday posted net income of 1.22 billion Swiss francs ($1.17 billion), helped in part by hefty inflows in its private banking business.
The Swiss giant earned CHF 1.12 in the latest quarter, down from CHF 2.81 a year earlier.
“During the second quarter we saw strong momentum in our wealth management business and a solid operating performance in investment banking,” said CEO Brady Dougan in a press release. “We continued to reduce our risk positions, as we have done since the early stages of the credit crisis.”
Within investment baking, income before taxes was CHF 281 million, compared with a ecord CHF 2.5 billion in the second quarter of 2007. Net revenues declined 50% from the second quarter of 2007, but rose from the previous quarter.
Credit Suisse said that despite the challenging market conditions, many businesses reported solid results. The year-on-year decline in revenues was due in large part to an industry-wide decline in origination activity, particularly in the structured products and leveraged finance businesses, compared with exceptionally high levels in the second quarter of 2007. Net revenues in the second quarter of 2008 also reflected combined net writedowns of CHF 22 million in the leveraged finance and structured products businesses and a fair value loss of CHF 503 million on Credit Suisse debt due to narrower credit spreads.
Fixed-income trading revenues were lower in the second quarter of 2008 compared with the same period a year earlier, reflecting the net writedowns and lower levels of origination activity. Revenues from the global rates business also declined significantly, partly offset by increases in the residential mortgage-backed securities and European high grade businesses.
Equity trading revenues decreased from the second quarter of 2007, primarily due to lower revenues in the equity proprietary trading and convertibles businesses than in the strong year-ago period.
Shares of Credit Suisse were recently higher by 4% at $49.86.
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