Credit Suisse said it would renew dividend payments and begin a buyback programme in the coming months, becoming the latest bank to signal it could withstand a pandemic that is gathering pace in Europe and the US.

The decision to renew payouts came despite Credit Suisse reporting a 38 per cent drop in third-quarter net income to SFr546m, hit by what the bank said was a range of exceptional charges. Overall revenues for the quarter fell 2 per cent to SFr5.2bn.

However, chief executive Thomas Gottstein insisted that excluding exceptional items, the underlying performance across the bank’s main divisions had been healthy.

Like many rivals, the bank’s loan loss provisions for the quarter — largely relating to the effects of Covid-19 on the economy — dropped to SFr96m, down from SFr296m in the second quarter.

“We have once again proven the strength of our diversified business,” Mr Gottstein said, adding that the bank expected to disperse the second tranche of its 2019 dividend — withheld at the request of Swiss regulators — next month.

Its third-quarter results included a SFr152m provision to cover major litigation expenses and a further SFr107m to cover restructuring expenses in the three months to the end of September.

The decline in profits also reflected a comparison to the strong third quarter the bank enjoyed in 2019, thanks to a SFr327m fillip from its sale of InvestLab, Credit Suisse said.

The lender said it expected revenues to be resilient in the months ahead as clients — particularly the super-wealthy — engaged in “elevated levels of transactional and trading activity across both our wealth management and investment banking business.”

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During the third quarter, a weak performance at its universal bank and wealth management divisions was partially offset by a stronger showing from its investment banking arm.

Pre-tax income at international wealth management fell 58 per cent year on year to SFr215m, with revenues down 20 per cent to SFr1.14bn. At its Swiss universal bank, pre-tax income fell 24 per cent to SFr430m, with revenues down 6 per cent to SFr1.3bn.

However, in an echo of the performance of rivals in Europe and on Wall Street, the Swiss lender’s investment bank fared better. Pre-tax income in investment banking rose 20 per cent to SFr370m, with revenues up 2 per cent to $2.04bn.

“Furthermore, we intend to resume our share buyback program in January 2021 with a target repurchase of up to CHF 1.5 billion of shares and a minimum of at least CHF 1.0 billion for the full year,” Mr Gottstein added.

The bank said it expected revenues to be resilient in the months ahead as clients — particularly the super-wealthy — engaged in “elevated levels of transactional and trading activity across both our wealth management and investment banking business.”

Particularly weak performance at Credit Suisse’s universal bank and wealth management divisions over the third quarter was partially offset by profitable activity at its investment banking arm.

Pre-tax income at International Wealth Management fell 58 per cent year on year to SFr215m, with revenues down 20 per cent to SFr1.14bn.

Pre-tax income at the Swiss Universal Bank fell 24 per cent to SFr430m, with revenues down 6 per cent to SFr1.3bn.

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Pre-tax income in Investment Banking rose 20 per cent to SFr370m, with revenues up 2 per cent to $2.04bn.

SFr1.5bn

Via Financial Times