Credit Suisse Posts 79% Increase in 3Q Profit

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Oct. 24 (Bloomberg) –- Olivetree Financial Strategist Simon Maughan breaks down Credit Suisse earnings and what they really mean with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

The poor old shareholder looking at the earnings were delivering on a per-share basis.

Earnings from continuing operations were up .01 franc.

That's simply not good enough.

With the problem?

They have to keep shrinking the balance sheet.

They have now met this 2019 requirement.

Very early.

Extremely early.

The shrinkage of assets means a loss of revenue.

They are not cutting costs or they are not cutting them there is basically no growth at all and that has to be a worry.

What is the message for investment banking?

Fixed income is something they have been watching on both sides of the atlantic in the last quarter.

What is the truth behind investment banking right now?

They should stand up and say, we are not big enough.

We are and upper midsized player but when things take a turn for the worse, we are not flexible enough to protect your bottom line.

That should be the real message.

You will get, we are a specialist player and we are in niche areas where we excel and we are focusing on them going forward but if you just look at the bottom line, the message is we are not big enough and we cannot cost costs enough.

They have increased that to 4.5 billion swiss wealth management?

They have always relied a little bit more on the quarter to quarter activity of the private client compared to someone like ubs.

That is the problem for the shares because they are on a long-term derating because ubs will emerge as a heavily focused wealth manager.

Credit suisse is doing this half and half business.

Which do you prefer?

Credit suisse or ubs?

Investors have spoken very loud and clear.

They are on a long-term derat ing.

It has a little flip when they get close to be cost of book rating and it bounces back a little.

It's up 37% and ubs is up 34%. it's better than deutsche bank and barclays.

The first data quarters were good.

You were getting a return on equity that justified the trade and now they have delivered this third

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