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 Wednes...