LONDON â€" Credit Suisse said on Wednesday that profit in the first three months of the year saw a large but widely expected increase, after the Swiss bank had booked significant charges on its own debt in the same period a year earlier.
Profit rose to 1.3 billion Swiss francs, or $1.4 billion, in the first quarter of this year, up from 44 million francs a year ago, when the bank booked a loss of 1.6 billion francs on the value of its own outstanding debt. Net revenue rose to 7.2 billion francs for the quarter, up from 6 billion francs a year earlier.
The results “show the positive momentum of our new business model,†chief executive Brady W. Dougan and chairman Urs Rohner wrote in a letter to shareholders published in its earnings report on Wednesday. “In an industry that still faces substantial restructuring, we have effectively completed our transformation.â€
Mr. Dougan has started to cut back on businesses that could be more costly for the bank because of tighter regulations while seeking to grow its wealth management operations. The bank also said its number of employees fell by 4 percent in the quarter, to 46,900 people. But Mr. Dougan did not go as far as his main Swiss banking rival, UBS, in scaling back investment banking operations.
Credit Suisse on Monday agreed to sell its private equity business, Strategic Partners, to the Blackstone Group for an undisclosed sum in an effort to reduce its presence in so-called alternative investments. Last month, the bank agreed to buy Morgan Stanley’s wealth management unit in Europe, the Middle East and Africa, which has $13 billion in assets under management.
In February, Credit Suisse boosted its target for cost cuts by $440 million, and now plans to have reduced costs by $4.83 billion by the end of 2015. The bank said Wednesday that it was on track to achieve that target. It plans to achieve those savings partly by bringing its wealth management and asset management operations closer together.
Credit Suisse said pretax profit in its private banking and wealth management business fell 7 percent to 881 million francs in the first quarter, saying relatively low interest rates failed to offset an increase in commissions and fees. Net new assets for the period totaled 12 billion francs.
The investment banking operation reported a pretax profit of 1.3 billion francs, up from 907 million francs in the first quarter of 2012, partly the result of cost cuts but also driven by the performance of its fixed-income sales and trading business.
