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Credit Suisse (CS) Stock Gains 3.6% on Higher Q3 Earnings
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Shares of Credit Suisse Group AG have gained 3.6% on the NYSE since the announcement of its third-quarter 2017 results last week. Net income attributable to shareholders came in at CHF 244 million ($253.5 million), up significantly from CHF 41 million in the year-ago quarter.
Results reflected a decline in expenses and lower provisions for credit losses. However, a decrease in revenues acted as a headwind.
Revenues & Cost Down (Adjusted Basis)
Net revenues came in at CHF 5 billion ($5.2 billion), down 2% from the prior-year quarter.
Total operating expenses declined 7% year over year to CHF 4.3 billion ($4.5 billion), mainly due to lower compensation and benefits expenses, and commission expenses.
Provision for credit losses came in at CHF 32 million ($33.3 million), down 42% from the prior-year quarter.
Strong Capital and Funding
As of Sep 30, 2017, Credit Suisse’s Look-through Basel III common equity tier 1 (CET 1) ratio was 13.2%.
As of Sep 30, 2017, the Look-Through Swiss CET1 leverage ratio was 5.2%. The Basel III CET1 ratio was 14.0%, down from 14.1% in the prior-year quarter.
Look-through risk-weighted assets declined 2% year over year to CHF 265 billion ($272 billion) at the end of the quarter.
Updates on Cost Saving Plan
Credit Suisse remains on track to achieve its cost-saving targets. The company is well positioned to lower its operating cost base below CHF 18.5 billion by the end of 2017.
Our Viewpoint
Focus on capital generation and restructuring initiatives is likely to strengthen Credit Suisse’s efficiency. However, given the challenging macroeconomic environment, we expect the company’s top line to remain under pressure.
Credit Suisse Group Price, Consensus and EPS Surprise
Deutsche Bank AG (DB - Free Report) reported net income of €649 million ($762.6 million) in third-quarter 2017, significantly up on a year-over-year basis. Income before income taxes grew 50.7% year over year to €933 million ($1.1 billion).
Barclays PLC’s (BCS - Free Report) third-quarter 2017 net income attributable to ordinary equity holders was £583 million ($763.1 million), reflecting a significant improvement from £190 million in the prior-year quarter.
HSBC Holdings plc (HSBC - Free Report) reported third-quarter 2017 results wherein it recorded net profit attributable to shareholders of $3 billion, which improved from a loss of $617 million in the year-ago quarter.
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Credit Suisse (CS) Stock Gains 3.6% on Higher Q3 Earnings
Shares of Credit Suisse Group AG have gained 3.6% on the NYSE since the announcement of its third-quarter 2017 results last week. Net income attributable to shareholders came in at CHF 244 million ($253.5 million), up significantly from CHF 41 million in the year-ago quarter.
Results reflected a decline in expenses and lower provisions for credit losses. However, a decrease in revenues acted as a headwind.
Revenues & Cost Down (Adjusted Basis)
Net revenues came in at CHF 5 billion ($5.2 billion), down 2% from the prior-year quarter.
Total operating expenses declined 7% year over year to CHF 4.3 billion ($4.5 billion), mainly due to lower compensation and benefits expenses, and commission expenses.
Provision for credit losses came in at CHF 32 million ($33.3 million), down 42% from the prior-year quarter.
Strong Capital and Funding
As of Sep 30, 2017, Credit Suisse’s Look-through Basel III common equity tier 1 (CET 1) ratio was 13.2%.
As of Sep 30, 2017, the Look-Through Swiss CET1 leverage ratio was 5.2%. The Basel III CET1 ratio was 14.0%, down from 14.1% in the prior-year quarter.
Look-through risk-weighted assets declined 2% year over year to CHF 265 billion ($272 billion) at the end of the quarter.
Updates on Cost Saving Plan
Credit Suisse remains on track to achieve its cost-saving targets. The company is well positioned to lower its operating cost base below CHF 18.5 billion by the end of 2017.
Our Viewpoint
Focus on capital generation and restructuring initiatives is likely to strengthen Credit Suisse’s efficiency. However, given the challenging macroeconomic environment, we expect the company’s top line to remain under pressure.
Credit Suisse Group Price, Consensus and EPS Surprise
Credit Suisse Group Price, Consensus and EPS Surprise | Credit Suisse Group Quote
Currently, Credit Suisse carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Deutsche Bank AG (DB - Free Report) reported net income of €649 million ($762.6 million) in third-quarter 2017, significantly up on a year-over-year basis. Income before income taxes grew 50.7% year over year to €933 million ($1.1 billion).
Barclays PLC’s (BCS - Free Report) third-quarter 2017 net income attributable to ordinary equity holders was £583 million ($763.1 million), reflecting a significant improvement from £190 million in the prior-year quarter.
HSBC Holdings plc (HSBC - Free Report) reported third-quarter 2017 results wherein it recorded net profit attributable to shareholders of $3 billion, which improved from a loss of $617 million in the year-ago quarter.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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