Business

Credit Suisse shares rise despite posting third straight annual loss

Credit Suisse shares rise despite posting third straight annual loss

Credit Suisse recorded a full-year net loss last year as changes in USA taxes wiped out its profits.

Credit Suisse's 2017 loss came on the back of a 2.3 billion franc writedown triggered by US tax reform. But investors are rewarding its improved ability to profit from increases in revenues.

Credit Suisse shares rose 3.7 percent to 17.1 Swiss francs by 0935 GMT.

Credit Suisse Group AG's trading revenue rebounded at the start of the year along with market volatility, in what Chief Executive Officer Tidjane Thiam said was evidence that the investment bank was alive and well after two years of cost reductions. Credit Suisse shut down the product because there is no prospect of price recovery and will compensate investors on February 21.

Credit Suisse also provided a glimpse into its business already in 2018, pointing to revenue growth in the double digits in percentage terms in the first six weeks of the year. "It's still a cheap stock", he said. On a pre-tax basis, it was the bank's first year in the black since Thiam launched the turnaround plan in 2015. In recent years, the bank has heavily incentivized investors to take more shares, not cash.

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That's a welcome change from the fourth quarter, when revenue from fixed-income trading fell 4.7 percent at Credit Suisse, while equities trading slumped 22 percent. He said the product had not had a material impact on the firm's finances. The bank posted a loss of 2.1 billion Swiss francs in its fourth quarter due to the writedown, better than the 2.6 billion franc loss reported this time previous year.

The Zurich-based bank said net loss for the year narrowed to 983 million Swiss francs, from a far larger 2.71 billion francs in 2016. "A year ago, the CEO said "you can see the momentum" in the markets businesses" and predicted a "very strong in the first quarter, barring unforeseeable events".

And, while revenues grew, Credit Suisse also reduced costs by 6% between 2017 and 2016.

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