The forced resignation of its CEO notwithstanding, Swiss multinational investment bank and financial services company Credit Suisse Group AG reported fourth-quarter earnings that beat expectations while revealing the highest annual profits in almost a decade.
It said pre-tax profits increased 40 percent year-on-year to $4.8 billion (CHF4.7 billion). The figure was the highest since 2010. For Q4 alone, the bank posted a net income of $870 million (CHF852 million). For the full year 2019, Credit Suisse reported a 69% increase in annual net income to $3.48 billion (CHF3.4 billion).
Analysts previously estimated a net income of $857 million (CHF838.5 million) for Q4 and $3.37 billion (CHF3.2 billion) for the full-year. Other key earnings results:
* Net revenues hit $22.9 billion (CHF22.4 billion) compared to $21.4 billion (CHF20.9 billion) in 2018.
* Operating expenses rose 1% from 2018 to $17.8 billion (CHF17.4 billion).
* Return on tangible equity came to 9% in 2019 vs 5% in 2018.
* The CET1 ratio stood at 12.7% vs 12.6% in 2018.
"We have started the year strongly across all of our divisions, and as a result, are cautiously optimistic about the prospects for the year ahead," said the bank in a statement.
All these happy tidings took place amidst a sordid spying scandal that saw the forced resignation of bank CEO Tidjane Thiam, who was born in the Ivory Coast. Thiam resigned on February 7 but leaves his post-February 14.
Thiam said the bank's Q4 and full-year 2019 results were a vindication of his strategy. He noted his three-year restructuring program, which began following his appointment in 2015, had finally begun to pay off.
"Our performance in 2019, the first full year post-restructuring, illustrates how much the bank has changed since 2015," he said.
He emphasized the bank's reduced risk ratios, better margins and growth in assets under management.
"We have turned Credit Suisse around, and our 2019 results show we can be sustainably profitable," said Thiam.
The scandal that saw Thiam's firing involved the surveillance of Iqbal Khan, Credit Suisse's former head of Wealth Management, who moved to rival bank UBS. Thiam was believed to have direct knowledge or involvement in the spying operation.
An internal investigation by law firm Homburger, however, is said to have found "zero evidence" Thiam was aware of the surveillance. The scandal strained Thiam's relationship with chairman Urs Rohner, who asked for his resignation.
Despite forcing Thiam to resign, Rohner had kind words about the latter. He said Thiam made an "enormous contribution" to the bank since he joined in 2015.
"Under Tidjane's leadership, Credit Suisse simultaneously repurposed our strategy, restored our capital, reduced our costs, de-risked our business promoted diversity and engendered an exceptional level of co-operation between various divisions," he said.
"It is to his credit that Credit Suisse is standing on a very solid foundation and has returned successfully to profit."
