Credit Suisse : Cuts Profitability Target Despite Strong 2Q

By Pietro Lombardi

Credit Suisse Group AG cut its mid-term profitability target despite a strong second-quarter performance, which beat analysts' expectations.

The Swiss bank now targets a return on tangible equity of 10% to 12% in the medium term, it said Thursday. This compares with a previous guidance of ROTE above 12% in the medium term.

The revised guidance came as the bank said that its second-quarter net profit rose 24% to 1.16 billion Swiss francs ($1.27 billion).

Revenue rose 11% to CHF6.19 billion.

The results beat expectations of a net profit of CHF764 million on revenue of CHF5.61 billion, according to a consensus forecast provided by the bank.

"While Credit Suisse lowered its medium-term ROTE target (no more short-term target), consensus is well below the new target," Vontobel said.

Write to Pietro Lombardi at [e-mail]; @pietrolombard10