Credit Suisse Does Better Than Expected In Q3, So Is The Bonus Panic Over?

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Credit Suisse bankers breathed a sigh of relief today as the third quarter numbers announced by the bank came in better than expected and seemed to dismiss fears that had circulated around the bank that it had suffered up to $900 million in trading losses. The Swiss bank said today that net revenues in its investment banking segment were down 5% compared to last year, primarily due to lower equity trading revenues. Revenues were also lower in equity underwriting and advisory fees, but the bank said declines in these segments were partially offset by increases in debt underwriting and fixed income trading revenues.
Although Credit Suisse declined to give the exact numbers and reasons for trading losses, the actual losses in equity trading revenue seem closer to the $240 million indicated by sources within the bank last week than the $900 million some had feared.
So how will the bank’s third-quarter performance affect bonuses at the bank? Today’s statement gives some indication when it notes that total operating expenses for the quarter decreased 1% “due primarily to lower compensation accruals in line with lower revenues…” Exactly what that statement means is a question Credit Suisse bankers are no doubt pondering this morning.

Credit Suisse Profit Declines 1.6% on Securities Unit
[Bloomberg]

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