Credit Suisse dropped the most since the start of 2015
Credit Suisse dropped the most since the start of 2015

Financial services company Credit Suisse Group has dropped the most since the start of 2015 in Zurich trading after the company revealed that a key measure of financial strength fell in the first quarter.

In a statement on Tuesday, the bank stated that the capital ratio to risk-weighted assets was at about 10%. At the end of 2014, it was 10.1%. The company's target was 11%. In the same quarter, net income rose about 23% to 1.05 billion Swiss francs. According to the company, increased trading activity encouraged private banking and securities unit.

As per reports, Credit Suisse has been cutting assets at the investment bank in order to improve buffers to survive potential losses. The company announced fresh cuts in February this year. Investors think that Tidjane Thiam, who is successor of Chief Executive Officer Brady Dougan, will downsize the bank more decisively so that he could focus on other money-managing businesses when take over in June.

In a note, Omar Fall, an analyst at Jefferies Group LLC in London, said that capital is already a concern for the market. The risk is that the debate around Tidjane Thiam moves from the potential for strategic change to the risk of capital rising, according to Fall.

In Zurich, shares of Credit Suisse fell more than 3%. The shares were down about 2.9% at 26.03 francs. On Tuesday, Chief Financial Officer David Mathers, said, "The capital ratio would improve along with the leverage ratio, a measure regulators are increasingly focusing on and which increased to 2.6% from 2.4%. Capital was hurt in the quarter by the company's share purchases for employee awards".

Dirk Becker, an analyst at Kepler Cheuvreux, said that the ratio of capital is a catastrophe. It is easy for the new CEO to say that that he sees this differently, Becker further added.




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