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Credit Suisse Profit Misses Estimates on Investment Bank

  • Fixed income trading revenue declined 53% in third quarter

Credit Suisse Group AG reported third-quarter profit that missed analyst estimates because of a loss in the investment bank and a bigger-than-expected drop in private banking and wealth management. The shares fell.

Net income decreased 24 percent to 779 million Swiss francs ($815 million) from 1.03 billion francs a year earlier, the Zurich-based company said in a statement Wednesday, citing a “challenging market environment and lower client activity.” The average estimate of seven analysts in a Bloomberg survey was for 858 million francs.

The investment bank posted a pretax loss of 125 million francs, contributing to a year-on-year decline in return-on-equity to 7.1 percent from 9.7 percent in the third quarter.

“The results were shocking and fixed-income trading in particular was a disaster,” said Alevizos Alevizakos, a London-based analyst with Keefe, Bruyette & Woods. “Investors will mainly be focusing on today’s strategy announcement.”

The stock...