LONDON -Credit Suisse said on Wednesday that profit fell 34 percent in the first quarter as the Swiss bank shed assets and streamlined its investment banking operations as part of an overhaul of its business.
For the first three months of the year, Credit Suisse reported earnings of 859 million Swiss francs, or about $976 million. That compares with profit of 1.3 billion francs in the same period a year earlier.
Analysts had expected the bank to post a profit of 1.15 billion francs in the first quarter, according to a survey by Reuters.
Revenue fell 8 percent to 6.47 billion francs.
Credit Suisse announced plans last year to shift some of its fixed-income operations and other businesses to a nonstrategic unit within the investment bank, as it focused more on wealth management. Credit Suisse and its larger rival UBS have shed loans and other debt in recent years to meet Swiss regulatory rules, while also bolstering their capital reserves.
Brady W. Dougan, the chief executive of Credit Suisse, said the company was able to achieve a return on equity of 14 percent in the quarter as a result of recent changes, not far from the company’s target of 15 percent.
“This strong performance was driven by significantly improved profitability in private banking and wealth management, solid returns in investment banking and continued effective cost and capital management,†Mr. Dougan said in a statement. “We saw continued momentum with clients across many of our key businesses, including the highest net asset inflows in our strategic businesses since the first quarter of 2011 and a meaningful increase in the share of assets under management from ultra-high-net-worth clients.â€
In the private banking and wealth management business, pretax profit rose to 1.01 billion francs in the quarter, compared with 881 million francs a year earlier.
The business had assets under management of 1.29 trillion francs at the end of the quarter, down from 1.31 trillion francs at the end of the first quarter of 2013. The decrease reflected a decline in assets associated with business lines considered by Credit Suisse to be nonstrategic.
The investment bank reported a pretax profit of 827 million francs, compared with profit of 1.3 billion francs in the prior-year period.
Within the investment bank, underwriting revenue was higher than in the first quarter of 2013, in part because of gains in market share. Revenue in its fixed-income business was lower in the quarter because of “substantially reduced client activity and challenging trading conditions†in global macro products and emerging markets, the company statement said. Equity sales and trading also were lower.
Credit Suisse has recently revised its fourth-quarter results twice to reflect increased legal costs. It first revised the results downward in March to reflect an $885 million settlement to resolve claims that it had sold questionable loans to the mortgage finance giants Fannie Mae and Freddie Mac in the run-up to the financial crisis.
Earlier this month, the Swiss bank revised its fourth-quarter results again to reflect an additional charge of 468 million francs in increased legal provisions, primarily related to a continuing investigation into Americans who secretly held assets in Swiss accounts. As a result, Credit Suisse reported a fourth-quarter loss of 476 million francs.
The first-quarter results included additional litigation provisions of 107 million francs.
