Credit Suisse AG – (NASDAQ:TVIX) rise to its highest level in three years, after the announcement of its strategies to boost its capital buffer which also add on some guidelines for enhancing asset reductions and continuing to providea return for investors.
The stock is down 14% so far in2015, while there was a 3% rise in the 49 member STOXX 600 Banks Price Index.
On Thursday, the second largest bank in Switzerland reported it returned to profit in the 4Q, depicting 921 million francs (US$991 million) with reference to net income. It is worth mentioning that last year it suffered a 476 million franc loss. The lender cut bonuses across the board.
The investment bank had been on a constant scale back by the chief executive officer,Brady Dougan, who has also been selling its real estate to boost Credit Suisse’s capital buffers that was highly affected by US$2.6 billion as a penalty for aiding Americans to evade taxes. The prospect of stricter leverage requirements in Switzerland has raised questions about the strength of the bank’s balance sheet, while earnings are under pressure from the surging franc.
According to a statement released by an analyst at Nomura Holdings, Jon Peace:
“People would react well to the improved leverage ratio. Credit Suisse seems to be able to mitigate the impact from the Swiss franc.”
Dougan said in an interview:
“We did feel it was right to acknowledge the impact of the settlement on the earnings and as a result the board, as well as the executive board, voluntarily took these reductions in compensation,”
Dougan’s Statement to media:
“Year-to-date profitability of the group is in line with last year. Our private banking and sales and trading businesses have shown an improving trend in recent weeks. Underwriting and advisory activities have started the year more slowly due to market volatility but we have a strong pipeline with execution dependent on market conditions.”
A statement by Nomura’s Peace:
“The investment bank, particularly in equities were very strong. A number of banks have indicated that trading picked up in the first months of the year. Credit Suisse’s business mix will lend itself well to that.”