What To Expect From Credit Suisse’s Q4 Earnings

by Trefis Team
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Credit Suisse is scheduled to report its fourth quarter and full-year results on February 14, and the bank is expected to report revenue of approximately CHF 20.5 billion for 2018. After reporting strong results in the first quarter, the bank’s revenue has saw pressure in Q2 and Q3, and we expect this trend to continue due to a relative lack of progress in resolving geopolitical tensions, increasing structural and regulatory changes, rising protectionism and trade disputes along with increased volatility, which affected investor sentiment and confidence in the second half of 2018.

We currently have a price estimate of $11 per share for Credit Suisse, which is slightly lower than the current market price. Our interactive dashboard on What To Expect From Credit Suisse’s Q4 Earnings outlines our forecasts and estimates for the bank. You can modify any of the key assumptions to arrive at your own price estimate, and see all of our financial services data here.

Segment Expectations

Credit Suisse’s Wealth Management business – which accounts for around 44% of its total revenue – fell approximately 9% in Q3 2018. Lower investment activity will likely impact the bank’s assets under management, and its revenue from Interest Income and Fee & Commission Income is likely to decline in the low- to mid-single digits for 2018. The bank’s trading revenue also likely saw some pressure in the fourth quarter, but trading revenue for the year still likely grew substantially.

Credit Suisse is likely to have seen improved profitability for full-year 2018, after reporting losses in the previous three fiscal years. That said, its net earnings are likely to take a hit due to a higher effective tax rate, which includes an additional 2% for the Base Erosion Anti-Abuse Tax as proposed by the U.S. Treasury. Overall, lower invested assets and moderate investment sentiment will impact company’s assets under management and hence its performance in Q4 2018.

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