ZURICH: Swiss bank Credit Suisse said on Thursday it is cautiously optimistic on prospects for business through to the year-end after reporting third-quarter profit that beat expectations.
The Zurich-based bank is in the middle of efforts to balance profits and risk-taking better between its investment bank and wealth management arm, which caters to the financial needs of wealthy people.
"We have seen a mixed start to October, with recent market volatility benefiting certain businesses across both divisions, while negatively impacting others," Chief Executive Brady Dougan said in a statement.
The bank said net profit jumped to 1.025 billion Swiss francs ($1.07 billion) in the third quarter, compared to the average forecast of 810 million Swiss francs in a Reuters poll. In the third quarter, Credit Suisse's private bank won 7.4 billion francs in net new assets, a key indicator for future revenue.
Many investment banks, including Credit Suisse, have made cutbacks in units trading in bonds, foreign exchange, commodities and other areas, since new regulations make it far costlier to maintain them. Meanwhile slack orders from clients have also cast a cloud on business.
The bank's securities unit was buoyed in the third quarter by the listing of Chinese e-commerce giant Alibaba. Investment banks including Credit Suisse netted $300 million in fees from that deal.
"We have a strong advisory and underwriting pipeline but the pace of execution in the fourth quarter will depend on market conditions," Dougan said.
The third-quarter results mark a return to profit for the bank after posting its biggest loss since the financial crisis in 2008 in the previous quarter, the result of a 1.6 billion Swiss franc ($1.78 billion) fine from U.S. authorities for helping its clients evade taxes.
Overall, the bank has achieved 3.6 billion francs of a 4.5 billion-franc cost-cutting target for 2015. It has bolstered a key capital ratio to 9.8 percent, or within striking distance of a 10 percent target by year-end.
Investors' focus is now shifting to European banks following a mixed set of results from U.S. peers, where legal issues marred results for some. Credit Suisse's cross-town rival UBS , Germany's Deutsche Bank and British bank Barclays all report earnings for the quarter next week.
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