Credit Suisse slumped to a loss in the second quarter, it said on Wednesday, with results weighed down by its investment banking business. The Swiss bank also announced a change to its leadership and a shift to scale back the tarnished investment bank.
The bank lost 1.59 billion Swiss francs, or about $1.65 billion, in the quarter, compared with a profit of 253 million Swiss francs a year earlier, it said.
The bank’s weak performance for the three months that ended in June stood in contrast to more upbeat reports from European rivals Deutsche Bank and UBS.
Credit Suisse has installed Ulrich Körner as its new chief executive after a string of scandals, including the blowup of the hedge fund Archegos Capital Management. A strategic review is underway to move the bank more toward wealth management and asset management and away from investment banking.
Most of Credit Suisse’s shortfall in the second quarter stemmed from the investment bank, which posted a net loss of $1.2 billion, driven by slower issuance of bonds and loans for companies and a decline in trading revenue.
Deutsche Bank, by comparison, reported a profit of 1.2 billion euros on Wednesday, or about $1.2 billion, which was well above analysts’ expectations and higher than the roughly $830 million it earned a year earlier. Switzerland’s UBS reported a profit of $2.1 billion on Monday, also modestly higher than a year earlier but short of analyst expectations.
UBS’s investment banking revenues also suffered from a drastic decline in debt and equity issuance, while it also noted a drop in activity among private clients amid volatility in financial markets.