Credit Suisse reports profit decline as a slowdown in wealth management

Credit Suisse third-quarter profit declined more than the estimates due to some extraordinary circumstances such as a slowdown in wealth management.

The bank profit declined by 38% during the reported quarter to $602 million(546 million Frances).The analysts were estimating a median forecast of 572 million Francs. Credit Suisse received a 327 million francs revenue from the sale of its InvestLab, a year earlier.

Chief Executive Thomas Gottstein in July announcedhis first major cast cutting strategy by merging the global markets trading division and advisory-focused investment banking and capital markets unit. His strategy was successful and the newly merged investment banking unit earned a pretax profit of 370 million francs, with 5% increase in trading heling equity and 10% increase in fixed income sales, while the revenue for capital and advisorymarketsrose 33%.

The share of the bank hit a five-month low in the early tradeand fell more than 5% because of low revenue from wealth management.The wealth management is suffering from foreign currency moves and lacked one-off items such as the prior year’s InvestLab salewithout which revenue would have risen 5%.

Christian Meissner, who is the former chief of  Bank of America, was hired earlier this month to co-lead the unit’s advisory efforts to grow the bank’s profit by 10 percent annually through better collaboration between the investment bank and greater lending efforts.

Credit Suisse is introducing a digital app aiming to grow its retail market share while saving on costs by challenge fintechs like Revolut. CS shares have lost more thana quarter of its value,staying ahead of the European banking sector as a whole butfalling twice as much as those of UBS.