Bloomberg Businessweek reported that Credit Suisse Group AG (NYSE:CS) plans to exit the commodities trading business. The firm just posted its largest quarterly loss since 2008 on the back of a $2.6-billion fine related to a US tax investigation.
As quoted in the market news:
The bank’s net loss in the second quarter was 700 million Swiss francs ($779 million), compared with a profit of 1.05 billion francs a year earlier and a 691 million-franc estimate from analysts. Zurich-based Credit Suisse posted higher-than-forecast earnings at the investment bank and lower profit in wealth management even as it attracted more net new money from rich clients than analysts had estimated.
‘The decision to exit commodities was probably taken mainly in the light of the capital weakness,’ Dirk Becker, a Frankfurt-based analyst with Kepler Cheuvreux, said by phone. ‘The results in the quarter weren’t that bad, with investment banking surprising on the upside. The only really negative development was the drop in wealth management gross margin.’