Credit Suisse surpassed market expectations posting a 42 per cent rise in net profit in the third-quarter on Wednesday as income from its managing money and investment banking increased.
Though, the performance did not offset its burdens of a long-standing legal dispute at its Winterthur insurance unit, which could cost the bank more than a billion Swiss francs before this year-end.
Credit Suisse (CS) is being rewarded for its overhauling. Analyst Vasco Moreno, Keefe Bruyette & Woods in London said: “The results are very strong. We are particularly encouraged by the private banking results and especially by the net new money inflow, which was very strong”
Net profit in the third quarter was 1.9 billion francs which is much better than the average of 1.513 billion francs predicted in a Reuters poll that included 16 analysts. It was up from 1.351 billion francs a year ago and 919 million in the second quarter.
New net money inflows into private banking business rose to 14.3 billion francs from 3.8 billion a year ago, as Credit Suisse tapped emerging markets in Asia and Eastern Europe.
Net revenues in the investment bank division rose 29 percent from the second quarter of the year to 4.3 billion francs with equity underwriting surging by 42 percent.
Credit Suisse shares have apparently outdone UBS because investors see more promise in it due to its restructuring.
Chief Financial Officer Renato Fassbind of Credit Suisse refused to divulge any further details when he said: "We are not giving any financial outlook, neither for the fourth quarter nor for the full year".
With its 2005 earnings which is 11.6 times more earnings than expected, Credit Suisse stock is trading at a discount to the European sector average multiple of 13.2 and below that of Bus's multiple of 12.8.
Credit Suisse shares have risen 20 percent this year compared with the average 13 percent gain of the 78-member Bloomberg Europe Banks and Financial Services Index.
Posted
on : Wed, 02 Nov 2005 16:15 GMT | Banking News
By : Chris Rowe
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