Credit Suisse Group AG’s share price down, intends to exit commodities trading, after posting its biggest quarterly loss since 2008

Credit Suisse Group AG announced that it intends to abandon commodities trading because it recently posted its largest quarterly loss since 2008 due to a 2.6-billion-dollar fine that was imposed on the bank as a settlement of a U.S. tax investigation.

Credit Suisse Group AG also shared that its net loss over the second financial quarter amounted to 700 million Swiss francs (779 million dollars) in comparison to a net profit of 1.05 billion Swiss francs reported over the same period a year ago. The loss was also larger than the median analysts forecast of 691 million Swiss francs. The bank also reported a 6% net revenue decline to 6.43 billion francs.

The bank is expected to deal with some difficulties due to the size and scope of the legal settlement, which it initially expected to erode about 1.8 billion dollars from its profit over the second quarter.

One of the analysts, who work with Kepler Cheuvreux – Mr. Dirk Becker commented for Bloomberg: “The decision to exit commodities was probably taken mainly in the light of the capital weakness. The results in the quarter weren’t that bad, with investment banking surprising on the upside. The only really negative development was the drop in wealth management gross margin.

Credit Suisse Group AG also said that it intends to make further reductions to its foreign exchange and rates businesses. The bank shared that it will shift its focus to foreign exchange operations and concentrate on “a combination of electronic trading and voice offering for larger and more complex trades”.

Credit Suisse Group AG was losing 1.38% to trade at 25.73 Swiss francs per share by 11:52 GMT, marking a one year change of -9.4%. According to the information published on the Financial Times, the 32 analysts offering 12-month price targets for Credit Suisse Group AG have a median target of 30.15, with a high estimate of 36.50 and a low estimate of 16.00. The median estimate represents a 15.56% increase from the last price of 26.09.