Credit Suisse shares have tumbled as investors fret about the cost of rebuilding its battered investment bank and a seasonal decline in its core business of managing money for the world's wealthy.
Credit Suisse shares fell over 5 percent to 39.30 Swiss francs this morning, leading a 0.9 percent drop in European banks, as investors ignored a better-than-expected net profit of 1.457 billion Swiss francs (€943.5 million) in the second quarter and focused on the bank's tough tasks ahead.
Credit Suisse Chief Financial Officer, Mr Phil Ryan
The group, Europe's 11th largest bank by market value, warned that many of the areas that had proven strong so far this year, especially the private banking division that caters to wealthy clients, would weaken.
"Typically, the third quarter is a weak quarter in private banking due to the seasonality of client behaviour," Chief Financial Officer Phil Ryan said in a conference call with analysts. "We do see that materialising to be the case in 2004."
The bank also warned of rising costs as it attempts to rebuild its investment bank Credit Suisse First Boston after two years of savage cuts. It did not give a more detailed outlook and stopped short of reiterating that it was "optimistic" for the year, as it had said just three months ago.