Credit Suisse's net loss narrowed in the fourth quarter, as the Swiss bank earned more commissions and fees as well as trading income. Spending ticked higher, undercutting the bank's pledge.
All of the Zurich-based bank's units recorded profits in the quarter, including its trading division, which had been hit by major write-downs in the year-ago period, as well as its private banking arm and its activities in Asia.
Credit Suisse nevertheless posted an overall loss of nearly 2.35 billion Swiss francs in the quarter alone, after agreeing to pay U.S. officials $5.28 billion for mis-selling mortgage securities in the run-up to the financial crisis of 2008/09.
Spending Uptick
The result owed as much to the operating health of Credit Suisse as it did to seemingly dramatic spending cuts: on the surface, Credit Suisse cut its total spending in the quarter by one-third to just over 7 billion francs.
However, its year-ago spending bill was bloated by a nearly 3.8 write-off of illiquid positions in its securities division.
Looking beyond the one-time effect, Credit Suisse cut salaries and benefits by 15 percent and lowered restructuring spending by 86 percent, which was offset by a 38 percent rise in general spending due to the U.S. settlement for residential mortgage-backed securities. Stripping out last year's write-down, the bank's quarterly spending actually rose on the year.
Dividend Despite Loss
Operationally, the bank won investment banking revenue as debt underwriting rose, while its private bank benefited from a boost to interest income as well as a gain on the disposal of real estate.
Credit Suisse said it will still pay a dividend, unchanged on the year, of 0.70 francs per share, out of reserves from capital contribution.
It is the first full year of results following a restructuring led by Tidjane Thiam announced in autumn of 2015. The results come ahead of a planned listing of Credit Suisse's Swiss unit, which at least one analyst has argued is looking increasingly unnecessary – at least as a capital-boosting move.
