* Credit Suisse posts 983 mln Sfr loss for 2017
* CEO says saw "strong start" to 2018
* Shares rise more than 3 pct on back of positive outlook
(Recasts, adds CEO comment and market reaction)
By Brenna Hughes Neghaiwi
ZURICH, Feb 14 (Reuters) - Credit Suisse on
Wednesday was upbeat on prospects for the year ahead, as it
enters the last leg of Chief Executive Tidjane Thiam's
three-year overhaul, hoping to put its third straight annual
loss behind it.
Thiam has been reshaping Switzerland's second biggest bank
by scaling back Credit Suisse's investment banking business to
concentrate on less capital-intensive private banking.
But the meltdown of one of the bank's volatility products
last week and two recent U.S. lawsuits over activities before
and just after Thiam took charge have raised questions about how
far his strategy has taken hold.
The bank on Wednesday also disclosed an inquiry into its
hiring practices in the Asia-Pacific region.
These troubles, combined with pressure from activist
investors, have put the bank's efforts to turn itself into a
premier bank for the world's ultra-wealthy under the
Credit Suisse has managed faster growth in its wealth
management business than rival UBS, growing assets
under management to a record 772 billion Swiss francs ($827
billion) last year while cutting 3.2 billion francs in costs
Thiam was positive about business in the first few weeks of
"We've had half a quarter now, and indications are very
positive," Thiam said. "We're being quite prudent in the numbers
we've disclosed here, because markets can change, but the
performance so far has been very strong."
In the first six weeks of 2018, the bank had a 10 percent
pickup in revenues in its Global Markets trading division and a
15 percent pickup in its Asia-Pacific trading business, as a
surge in market turbulence saw activity levels rise.
The bank's shares rose more than 3 percent.
"2018 is set to be a year in which Credit Suisse should be
able to deliver turnaround benefits from the large-scale
restructuring programme," Baader Helvea analyst Tomasz Grzelak
said in a note.
The bank said market volatility -- which was also behind the
meltdown of its exchange-traded notes used to bet on stock
market swings -- was a double-edged sword. Too much of it and
clients could become averse to trading risks or hold off on new
Investors say Credit Suisse's transformation is moving
Marc Halperin, a fund manager at top-30 Credit Suisse
shareholder Federated Investors, said investors had weathered
enough not to be put off by last week's derivatives shakeup.
"We've been through a lot with this thing. It's still a
cheap stock," he said.
"They're on the right track," Thomas Jaeger, a senior
portfolio manager at Mirabaud Asset Management, said ahead of
the results. "They've made great strides in reducing their cost
base and in a supportive environment should profit more than
others when returns start shooting up."
Credit Suisse's 2017 loss came on the back of a 2.3 billion
franc writedown triggered by U.S. tax reform. On a
pre-tax basis, it was the bank's first year in the black since
Thiam launched the turnaround plan in 2015.
The group proposed a reduced dividend of 0.25 francs per
($1 = 0.9332 Swiss francs)
(Reporting by Brenna Hughes Neghaiwi; additional reporting by
Angelika Gruber and Simon Jessop; Editing by Michael Shields and
First Published: 2018-02-14 08:50:27
Updated 2018-02-14 16:20:46
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