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Credit Suisse Q2 Profit Climbs; Plans Dividend, To Review Share Buyback

Swiss banking major Credit Suisse Group AG (CS) reported Thursday that its second-quarter net income attributable to shareholders grew 24 percent to 1.16 billion francs from last year's 937 million francs, reaching the highest second quarter in a decade.

Pre-tax income was 1.55 billion francs, up 19 percent from 1.30 billion francs a year ago.

Provision for credit losses surged to 296 million francs from 25 million francs a year ago.

Net revenues increased 11 percent to 6.19 billion francs from 5.58 billion francs last year.

As in the previous quarter, second-quarter results were heavily influenced by the COVID-19 pandemic.

Total Investment Banking net revenues were up 38 percent year on year, on a US dollar basis. Private Banking net revenues were down 3 percent.

Total Assets under Management or AuM were 1.4 trillion francs at the end of the second quarter.

Further, the Board of Directors expects to distribute the second half of the full dividend amount of 0.2776 franc gross per share as originally proposed to shareholders for the financial year 2019, subject to approval by shareholders at an Extraordinary General Meeting to be held on November 27.

The Board intends to propose a second dividend distribution equal to the first distribution of 0.1388 franc gross per share for approval by shareholders at the EGM.

Further, the Board intends to review 2020 share buyback program subsequent to the EGM.

In the medium term, in a normalized environment, the company expects to distribute at least 50 percent of net income to shareholders.

Separately, Credit Suisse announced the launch of key initiatives to reinforce strategy. Key changes with effect from August 1 include creation of a global Investment Bank, and combined Chief Risk and Compliance Officer or CRCO function, among others.

The company aims to generate run-rate savings of approximately 400 million francs per annum, from 2022 onwards, allowing for reinvestment in full, subject to market and economic conditions, in growth initiatives across the Group.

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