Steffen Schmidt/European Pressphoto AgencyBrady Dougan, chief of Credit Suisse.
4:40 p.m. | Updated
LONDON — Credit Suisse said on Thursday that it had swung to a profit in the fourth quarter of last year from a loss in the period a year earlier, and announced that it would cut more costs than previously planned.
The bank, Switzerland’s second-biggest after UBS, said net income for the final three months of 2012 was 397 million Swiss francs ($436 million); it posted a loss of 637 million francs ($700 million) in the fourth quarter of 2011.
Credit Suisse, based in Zurich, said it would increase its cost-cutting target by $440 million, to $4.83 billion, by the end of 2015.
“Going into 2013, revenues have so far been consistent with the good starts we have seen to prior years,” the chief executive, Brady W. Dougan, said in a statement, adding that profitability was “further benefiting from the strategic measures.”
On Tuesday, UBS reported a loss of $2.1 billion for the fourth quarter because of costs to settle legal matters, including its role in a global rate manipulation scandal. Both Swiss banks have reacted recently to stricter capital rules introduced by Swiss regulators by revamping their investment banking operations.
While UBS’s shares jumped after it said in October that it would eliminate 10,000 jobs, Credit Suisse investors were far less impressed with changes that the bank announced in November.
Those changes, announced by Mr. Dougan, included appointing a new co-head of investment banking and merging the bank’s asset management division into its wealth management and private banking unit.
The new structure is meant to help Mr. Dougan fulfill his pledge to save billions of francs by 2015, and to make the lines between wealth management and investment banking clearer.
Credit Suisse said on Thursday that 21 percent of its net revenue was from the collaboration among its different divisions. The bank also reduced its total compensation by 5 percent in 2012 from a year earlier.
Private banking and wealth management had a pretax profit of $1 billion in the quarter, up from $585 million in the period in 2011.
Investment banking had a pretax profit of $327 million, a turnaround from a loss of $1.54 billion in the fourth quarter of 2011, as it made more money from debt sales and trading.
Credit Suisse said it proposed to pay a dividend of 10 centimes in cash and 65 centimes in shares for 2012.
Article source: http://dealbook.nytimes.com/2013/02/07/credit-suisse-returns-to-profit-eyes-more-cost-cuts/?partner=rss&emc=rss
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