Credit Suisse says a 130 million Swiss franc ($147.8 million) hit to pretax profit at its private banking unit, due to the Swiss franc’s strength

Credit Suisse says a 130 million Swiss franc ($147.8 million) hit to pretax profit at its private banking unit, due to the Swiss franc’s strength, is hiding progress from the money-management unit, the growth of which is key to investors in the stock.

The private bank is grappling with a Swiss franc which has been persistently strong against the euro and U.S. dollar, ultimately putting private bank targets set by Chief Executive Brady Dougan into question just a few short months after they were scaled back.

While the franc was largely steady against the euro in the quarter, the Swiss currency strengthened roughly 5% against the U.S. dollar. That meant pain for Credit Suisse and other private banks.

With a pretax unit margin of 26% in the first quarter, Credit Suisse’s private bank is far from its 30% target, which was lowered from 40% in February. The currency hit is one all Swiss private banks are taking, and Credit Suisse’s much smaller rival EFG International Wednesday warned on net profit targets because the franc is eating into profits.

UBS, which Tuesday reported an 18% drop in first-quarter net profit, made little of its franc troubles, if only out of the understandable desire to focus on its return to private bank fund inflows, as opposed to outflows.

To be sure, Credit Suisse is poised to benefit as soon as the Swiss franc eases. But currency strategists suggest the strong franc, a major source of worry for Switzerland’s exporting economy, may become a fixture. Eurozone debt problems are likely to keep pressuring the euro, and if the Swiss National Bank begins lifting rates in the summer for the first time in nearly four years–as widely expected–the franc is set to remain strong, Commerzbank forex strategist Alexandra Bechtel said Wednesday.

That in turn leaves banks like Credit Suisse swallowing a currency loss because much of its expenses are in Swiss francs.

“Credit Suisse blames the Swiss franc for hiding the underlying growth trend of its wealth management business, but maybe the strong Swiss franc will be permanent in which case it needs to do something about its large Swiss franc cost base if clients continue to invest mostly in U.S. dollars and euros,”