Private banking profits were higher than the first quarter by nearly 5%, which the bank said was due mostly to favorable market movements and new assets mainly in Europe and emerging markets. Pre-tax revenue in its private banking unit dipped 21% to CHF 268m ($293.8) while assets under management held by the firm’s relationship managers saw a relatively small 5% drop of from year-on-year to CHF 344.5bn ($377.5bn). ‘Potentially lower assets under management, lower performance fees and investment-related revenues, a shift towards lower risk asset classes and lower transaction volumes would likely continue to impact results in our Asset Management business,’ the continued in the report. ‘While there have been some short-term benefits from higher market volatility and trading reflected in our 2020 results, the negative effects from distressed equity markets, lower interest rates, the foreign exchange environment and potentially significant credit losses are likely to impact our results for future quarters,’ it said. Its report published on Thursday offered sobering comments relating to the IWM division, saying the ‘outlook of our business is uncertain due to the spread of Covid-19.’ The litigation costs in the cases were then offset by higher compensation and benefits for the unit’s employees. Operating expenses stood at CHF 891m ($977m), a 2.8% decline since last year, reflecting a drop in expenses in the IWM division the firm attributed to the closure of a number of banking-related court cases in the US and Europe which the bank had set aside CHF 32m ($35.1m) to deal with. Income after taxes for the entire division also dropped by 7% from the second quarter 2019 to CHF 1.27bn ($1.39bn) which the Swiss group attributed to lower transaction and performance-based earnings alongside reductions in profits made from commissions, fees and net interest income. Pre-tax profits stood at CHF 348m ($381.6m) in the second quarter, down 22% from the same point last year while assets rose to CHF 97.06bn ($106.4bn) beating out numbers posted in 2Q19’ and in the first quarter of this year. Meanwhile, the Swiss bank posted declines in revenue for its international wealth management (IWM) business in the second quarter while the unit’s assets surged. With this move, Credit Suisse aims to develop leading content, advisory, investment and capital market solutions across wealth management, corporate and institutional clients and provide one single house view with a focus on supertrends and sustainability at its core. It will leverage all the capabilities of the IS&P division, which includes the CIO office responsible for house view on markets, macro research and wealth management investment solutions and products, including discretionary mandates. The new SRI division will not only combine IS&P, but also impact advisory and finance, global markets and APAC equity research as well as marketing and branding teams. This is while fund selection stays with Steven Bates, who is head of investment products & selection and reports into Strobaek.Īccording to the spokesperson, IS&P and the global CIO teams have been elevated to bring increased efficiencies and drive growth for recurring revenue line and house view/thematic products with sustainability at its core. The move will not result in changes to IS&P leadership or structure at present. The new SRI unit will be managed by Lydie Hudson, who was most recently chief compliance and regulatory affairs officer. It is not yet known who will be taking over his IWM responsibilities. He will move from IWM to the newly-formed structure, which encapsulates the IS&P division, a spokesperson confirmed to our sister publication Citywire Selector.
This new unit will be led Michael Strobaek, Credit Suisse IWM’s global chief investment officer and head of investment solutions and products (IS&P). The main change impacting its investment and IWM divisions is the creation of the Sustainability, Research and Investment Solutions (SRI) unit. The changes are being carried out as part of an initiative launched by Thomas Gottstein, who replaced Tidjane Thiam as chief executive at the Swiss firm around six months ago, and will lead to the creation of three new units.Īccording to Reuters, which quoted a memo from the international wealth management (IWM) division’s chief executive officer Phillip Wehle, the bank is creating a new investment banking and advisory unit, another focused on sustainable investing, and is also planning on merging its lending business into Credit Suisse’s International Financing Group. Credit Suisse is carrying out a restructure across its wealth management and investment banking businesses as it looks to increase efficiency and cut costs.