Credit Suisse posts surge in profit but warns on coronavirus loss
Credit Suisse today posted a sharp rise in profit for the first quarter but warned of potential loan losses caused by the coronavirus crisis.
The bank reported a 13 per cent rise in pre-tax profit of 1.2bn Swiss francs (£1bn) in the first three months of the year, while net profit surged 75 per cent to 1.3bn francs.
Net revenue also ticked up seven per cent to 5.8bn francs over the period, while return on tangible equity was 13.1 per cent, up from 8.6 per cent on the previous quarter.
However, the Swiss lender put aside a 568m franc provision for potential loan losses amid concerns about the economic impact of the coronavirus pandemic. In this first quarter 2019 its provision was just 81m francs.
“The scale of the adverse economic impact of the Covid-19 crisis is still difficult to assess and we would caution that we may also see further reserve build and impairments in the coming quarters, particularly in our corporate bank and other loans, outside Switzerland, as well as from our investments in asset management,” the bank said.
Despite this, Credit Suisse said it would be able to deliver a “resilient” performance for the year.
“Thanks to our strong capital and liquidity base, we are well positioned to support our clients, employees and societies in the coming quarters, during which we expect the Covid-19-related uncertainty to persist,” said chief executive Thomas Gottstein.
It marked the first quarterly results for Gottstein since taking over from Tidjane Thiam, who quit the bank in February following a spying scandal.
Credit Suisse is the first major European bank to report earnings since the coronavirus outbreak brought global economies almost to a standstill.
Last week Wall Street giants Morgan Stanley, Goldman Sachs, Bank of American, Citi and Wells Fargo all posted steep profit drops in the first quarter as the world looks set to endure the deepest recession since the 1930s.