Credit Suisse has reported adjusted net revenues of CHF5bn (US$4.99bn) - down 2% year on year (Q3 2017: CHF15.7bn, up 6% year on year), which were supported by a 5% year on year growth in its equities franchise and increased client activity in equity derivatives in Asia-Pacific, according to the bank's quarterly results.

Credit Suisse's global markets division delivered adjusted pre-tax income of US$101m and net revenues of US$1.3bn. The 6% decline in net revenues compared to the same period of last year was offset by a 5% growth in equities, while the 'continued outperformance' in the bank's securitized products franchise, was also offset by 'a slowdown in credit trading and issuance activity'.

In Asia-Pacific, the bank's markets business generated adjusted pre-tax income of US$52m with net revenues growing by 19% to US$354m, 'driven primarily by stronger trading performance and increased client activity in equity derivatives, partly offset by lower revenues from emerging markets rates products'.

According to the bank, revenues 'have been resilient' over the last three quarters during a period of repositioning for the business. 'Importantly, in the seventh quarter of our restructuring, we were able to generate capital organically, accreting approximately CHF400m on a look-through basis and ending the quarter with CHF34.9bn of look-through CET1 capital,' stated Tidjane Thiam (pictured), chief executive officer of Credit Suisse.

Structured products
Credit Suisse has been the fourth most active bond provider for retail structured products globally with over 1,800 hedged structures worth over US$6.1bn, year to date, according to SRP data. More than half of the products marketed by the Swiss bank during the first nine months of 2017 were sold in the US market (912 products) and its home market Switzerland (216 products). Year to date the Swiss bank has been active in 13 markets across regions including Sweden (63 products), Germany/Austria (49 products), the UK (28) and Japan (26).

In Q3 2017, Credit Suisse issued 549 products with an estimated sales volume of US$1.4bn, down from 632 products worth US$1.8bn sold in the previous quarter, and from 559 products worth US$1.9bn, during the same period in 2016, according to SRP data. In Asia-Pacific, the Swiss bank has issued 20 products including 13 in Taiwan and three in Japan with seven different distributors including Shin Kong Bank, Citibank, CTBC Bank and SBI Securities, among others. In Asia-Pacific, the Swiss bank launched Credit Suisse Invest - a human-led digital advisory solution combining 'the bank's digital private banking technology platform, a retrocession free offering and a contextualized advisory process', aimed at professional and accredited investors with accounts at the bank's Hong Kong and Singapore.

Despite the positive backdrop, at the beginning of September the Swiss bank was at the receiving end of a law suit in the High Court of Singapore filed by a retired stockbroker from Malaysia against the Singapore branch of the Swiss bank for breaching its duties and failing to manage his private wealth account with care 'when giving advice and/or providing information' in relation to high-risk structured investment products, including knock-out discount accumulators (Kodas) and dual currency investments (DCIs).

Divisional breakdown
The bank's investment banking & capital markets divisions 'achieved a strong performance across all key products' year to date, according to the report, and 'continued to deliver against its strategy in the traditionally slower third quarter, with increased share of wallet in advisory, equity underwriting and Leveraged Finance'. Adjusted pre-tax income reached US$54m for the quarter and totalled US$297m year to date, up 92% compared to the same period of last year. This performance was driven by a 28% rise in equity underwriting revenues and a 10% increase in debt underwriting revenues year on year.

In Private Banking, the bank saw a 'sharp improvement in profitability', with adjusted pre-tax income for the quarter growing 43% year on year to CHF272m. The bank's wealth management franchise also 'delivered strong results', with record adjusted pre-tax income of CHF581m, year to date, exceeding the total adjusted pre-tax income for 2016. Net new assets rose to CHF15.6bn, also exceeding the full-year 2016 level.

Credit Suisse has spent most of 2017 restructuring global markets, putting equities, credit and a solutions platform, including the bank's derivatives capabilities across products, in one unit. As a result Mike Stewart, was appointed head of equities, and a number of long-standing equity derivative bankers including Walter Rotondo, co-head of retail and flow equity sales, and Andrea Negri, head of equity derivatives sales, Emea solutions, parted ways with the bank.

However, in Q3 the Swiss bank made several senior appointments to revamp the structured products business including Mike Di Iorio, former head of equities distribution at Barclays in London, who joined as head of equities in Europe, Middle East & Africa (Emea), and Michael Ebert, who left Bank of America Merrill Lynch to join the Swiss bank as global head of equity derivatives and international trading solutions. Both, Di Iorio and Ebert report to Stewart.

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