Please send job moves to
[email protected]Credit Suisse's
Asia markets arm
returns to profit
CREDIT SUISSE Sû!SIAû0ACIlCûMARKETSûDIVISIONû
RETURNEDûTOûPROlTABILITYûINûTHEûlRSTû
QUARTERûOFû ûBENElTINGûFROMûTHEûSAMEû
improved trading conditions that lifted the
performance of other banks in the region.
4HEûUNITûPOSTEDûAû1ûPROlTûOFû3&RMû
53M ûAGAINSTûAû3&RMûLOSSûAûYEARû
earlier and a SFr53m loss in Q4, the Swiss
bank reported last Wednesday.
This was only the second quarter in
WHICHûTHEûBANKûHASûMADEûAûPROlTûINûITSû
Asian markets division since Q3 2016,
underscoring its susceptibility to shifts in
trading conditions.
Overall the APAC division reported
PRE
TAXûPROlTûOFû3&RM ûUPûûONûTHEû
PREVIOUSûYEAR ûONûNETûREVENUESûOFû3&RM û
12% ahead of last year.
Like most of its rivals, Credit Suisse faced
low volatility in 2017 and is grappling with
competition from Chinese brokerages as
WELLûASûTHEûSHIFTûINûFUNDûmOWSûTOWARDSû
passive managers.
2ESULTSûFROMûlXED
INCOMEûSALESûANDû
trading in Asia were especially encouraging,
with revenue increasing 270% quarter on
quarter to SFr85m.
Its equities segment, a far more
important business for the bank, was
RELATIVELYûmAT ûASûITûEKEDûOUTûAûûRISEûINû
revenue to SFr243m.
The bank said this resulted from higher
prime services revenues, although it noted
that revenues from cash and derivatives
were lower for the quarter.
The subdued performance in equitiesis surprising as several US banks, notably
Citigroup and Morgan Stanley, have singled
out their Asia equities business for praise
this quarter.
Credit Suisse is the only major
investment bank to provide a full
breakdown of its results in Asia, however.
Its performance in Asia was in line with
its global results as group revenues fromequities sales and trading rose just 1.5% to
SFr733m compared with a 34% rise among
THEûlVEûMAJORû53ûBANKS
Conversely, Credit Suisse won a bigger
MARKETûSHAREûINûlXEDûINCOMEûWITHû
REVENUESûUPûûTOû3&RMûCOMPAREDû
with a 2% rise among the US banks.
Chief executive Tidjane Thiam dismissed
concerns about the underperformance
in markets relative to the bank’s peers,
claiming the group was now principally
focused on wealth management.
“We set out to completely change the
balance and composition of the group in an
accelerated way. This has seen a complete
change in the nature of our PTI [pre-tax
income]. 80% is now wealth management.
Global markets is a fraction of what it was,”
he said.
Private banking assets under
management in Asia hit a record of
3&RBNûATûTHEûENDûOFûTHEûQUARTERû
COMPAREDûWITHû3&RBNûINû1
The bank reported revenues of SFr208m
FORûADVISORY ûUNDERWRITINGûANDûlNANCING û
an increase of 17% year on year and an 11%
decline versus Q4.
It said it had a strong quarter in M&A
having won mandates on Alibaba’s
33% acquisition of Ant Financial and
Equis Energy’s US$5bn sale to Global
Infrastructure Partners.
THOMAS BLOTTAxis Bank suffers first quarterly loss
AXIS BANK ûREPORTEDûITSûlRSTûQUARTERLYûLOSSû
last Thursday after a surge in bad loans,
capping a troubled year for India’s third-
biggest private sector lender by assets.
The Mumbai-based bank made a net
LOSSûOFû2SBNû53M ûFORûTHEû
lSCALûFOURTHûQUARTERûTOû-ARCHûû4HEû
RESULTSûREmECTEDûAûDESIREûTOûSPEEDûUPûNON
performing asset recognition, said chief
executive Shikha Sharma, who is due to
step down at the end of December after
nine years at the helm.
“With this accelerated recognition, we
believe the NPA recognition phase of this
credit cycle is now nearly complete and the
focus shifts to resolution,” she told a news
conference.
Axis has seen its non-performing loans
jump more than eight times in the past
THREEûYEARSûTOû2PBN ûORûûOFû
its loan book, at the end of March. In the
latest quarter, it added Rp165.36bn in
incremental bad loans in light of recent
central bank rule changes.
Finance chief Jairam Sridharan predicted
net NPL additions in the year to March
ûWOULDûBEûhSIGNIlCANTLYûLOWERv ûWHILEû
lending growth will be in the “high teens”.
For the March quarter, loans grew 18%,
driven by a 23% rise in retail customer
LOANSû.ETûINTERESTûINCOMEûGROWTHûWASûmATû
in the quarter and rose 3% for the full year,
resulting in a net interest margin of 3.44%.EARLY EXIT FOR CEO
On April 20, Axis appointed headhunting
lRMû%GONû:EHNDERûTOûHELPûITûSEARCHûFORû
a new chief executive and said its board
would ensure that the process is completed
before Sharma’s term ends.
!XISûSAIDûONû!PRILûûTHATû3HARMAûWOULDû
step down at the end of 2018, days after
India’s central bank was reported to
have expressed concerns about her being
granted a three-year extension.
Axis Bank has also faced other problems.
A central bank audit last year found more
bad loans than it had originally reported forthe year ended March 2017.
In December, the bank was ordered by
India’s markets regulator to conduct an
internal investigation into a suspected
LEAKûOFûlNANCIALûINFORMATIONûANDûTOû
strengthen its handling of such data, after
a Reuters report documented messages
about company results being circulated on
PRIVATEû7HATS!PPûGROUPSûAHEADûOFûOFlCIALû
release.
The bank has submitted its report on
the investigation to the capital markets
regulator, but has yet to hear back, Sharma
said last week.
Axis Bank’s smaller rival YES BANK last
Thursday reported a better-than-expected
ûRISEûINû1ûPROlTûASûITSûBAD
LOANûRATIOû
narrowed.
.ETûPROlTûROSEûTOû2SBNûINûTHEû
QUARTERûENDEDû-ARCHû ûFROMû2SBNûAû
year earlier.
Gross bad loans as a percentage of
total loans stood at 1.28% at end-March,
compared with 1.72% in the preceding
quarter and 1.52% in the year-ago period.
Interest income was up 32%.
DEVIDUTTA TRIPATHY, VISHAL SRIDHAR“We set out to completely
change the balance and
composition of the group in
an accelerated way. This has
seen a complete change in
the nature of our PTI [pre-tax
income]. 80% is now wealth
management. Global markets is
a fraction of what it was.”