Earnings Preview: Credit Suisse Q2 seen lower

Associated Press

GENEVA (AP) — Credit Suisse Group reports second-quarter results before trading opens Thursday in Zurich.

WHAT TO WATCH FOR: With the Swiss franc soaring against other currencies and trading volumes flat, Switzerland's second-biggest bank is expected to post disappointing second-quarter results.

Speculation is rife that Credit Suisse will announce sizeable job cuts to reduce costs and please the market.

Investors are also looking to see how the Zurich-based bank will deal with a recently-announced U.S. tax evasion probe similar to the one that hit cross-town rival UBS AG three years ago.

WHY IT MATTERS: Credit Suisse is a major European institution with a strong presence in investment banking, private banking and corporate advisory. The outcome of its tax evasion case could again affect the entire Swiss banking industry whose storied tradition of client secrecy was already weakened by a deal Switzerland struck to save UBS.

WHAT'S EXPECTED: Most analysts expect net profits to drop by more than 30 percent compared to last year. Zuercher Kantonalbank predicts earnings of 1.01 billion Swiss francs ($1.25 billion).

LAST YEAR'S QUARTER: Credit Suisse reported a net profit of 1.6 billion francs (then $1.5 billion) in the second quarter of 2010.

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