Credit Suisse profits up despite rough market
Credit Suisse has weathered rough market conditions in June to record a sharp rise in quarterly profits.
The Swiss banking giant said net income in the three months to June rose 40% from a year ago to 1.16bn Swiss francs ($1.2bn; £810m).
Trading revenues were hit, as debt markets took fright at the prospect of an end to monetary stimulus in the US.
But its investment bank was buoyed by fee income and and strong earnings by its equity market traders.
The unit earned sharply higher commissions by helping clients raise money from the markets through share and bond issues.
The investment bank more than doubled its pre-tax profits compared with a year earlier to 754m francs - in part because profits in 2012 were undermined by the eurozone crisis.
Profits may have been even higher this spring, had it not been for a sharp rise in long-term interest rates as markets reacted to plans by the US Federal Reserve to begin tapering its quantitative easing programme of money creation and debt purchases later this year.
"In the longer term, the transition to higher rates will benefit our business," said chief executive Brady Dougan, in part because it means the wealthy clients of the Swiss group's private banking business can expect to earn more income on their investments.
In the short term, however, the rough markets undermined client activity in June and July, the bank said.
Pre-tax profits at its private banking business fell 7% from a year ago to 917m francs, in part because the unit had to pay some 100m francs in withholding taxes to the UK as part of a new deal to clamp down on tax evasion.
The unit saw further strong inflows of new client money, particularly from developing countries, totalling 7.6bn francs.
Earlier this week, rival UBS revealed estimated second quarter profits of 690m francs that were much stronger than expected, as well as its highest inflow of client money in six years.