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NEW YORK (
TheStreet) -- Swiss banking ain't what it used to be, but consenus-beating results from
Credit Suisse(CS - Get Report) on Thursday prove it ain't half bad either.
Credit Suisse earned 1.76 billion Swiss francs ($1.88 billion), 217 million Swiss francs ($232 million) ahead of consensus estimates. While most of the beat came from Credit Suisse's investment banking division, JPMorgan analyst Kian Abouhossein argued strong margins and net new money flows in wealth management were an important contributor to the strong results.
Wealth Management profits before taxes were 5% above consensus at 523 million Swiss francs ($558 million), with pretax margins of 25%. Net new money inflows of 7.5 billion Swiss francs ($8 billion) showed annualized growth of 3.6%, in line with management targets.
The results are welcome news for Swiss bankers, who have been
giving up ground to Singapore as a preferred destination for rich people to park their money. The industry is still recovering from a major crackdown by the U.S. tax authorities, who charged Swiss banks with helping U.S. citizens avoid taxes.
Despite the strength in wealth management and investment banking, JPMorgan's Abouhossein expressed disappointment at Credit Suisse's fixed income currencies and commodities trading results, which he called "second worst in the industry so far and worst in terms of QoQ decline." Still, Credit Suisse remains one of his top stock picks among global investment banks, behind only
UBS(UBS - Get Report). His third, fourth and fifth picks, respectively, are
Morgan Stanley(MS - Get Report),
Deutsche Bank(DB - Get Report)and
Goldman Sachs(GS - Get Report).
Written by Dan Freed in New York.