Credit Suisse swings back to profit after taking huge fines

Third quarter pre-tax profits beat forecasts and contrasted with a second quarter loss of Swfr700 million

(Reuters)

Credit Suisse, which employs more than 7000 people in London, bounced back into the black today after taking a huge hit from fines in its first half.

Third quarter pre-tax profits of Swfr1.3 billion (£852 million) comfortably beat analysts’ forecasts of Swfr808 million and contrasted with the second quarter loss of Swfr700 million.

Profits were driven both by private banking and wealth management and investment banking, where pre-tax income rose 43 per cent to Swfr995 million.

Chief executive Brady Dougan said of the final quarter: “We have seen a mixed start to October, with recent market volatility benefiting certain businesses across both divisions, while negatively impacting others. We have a strong advisory and underwriting pipeline but the pace of execution in the fourth quarter will depend on market conditions.”

The bank was hit by $2.7 billion (£1.6 billion) of fines in the second quarter, largely due to settling a long-running US tax investigation.

Dougan added: “Investment banking’s strategic results reflect substantially increased profitability, improved returns and robust client activity across many of our businesses.”