Top Firms Begin To Feel The Pinch

Well, we've had a raft of third-quarter profit figures released this week. And, although some firms did better than others, there appears to be a few indications that we might be about to come off the good times. Having said that, the third period could just be a rogue quarter.

Reuters reports that Credit Suisse's third-quarter numbers came in well ahead of expectations, despite weaker equities trading numbers. Profits came in just 1.6% down at $1.52bn for the period, fuelled by strong fixed income figures. As a whole, however, profits at the securities unit fell 19%. Credit Suisse CEO, Oswald Gruebel, said in a statement that in 'the third quarter our wealth management result was seasonably lower, while our investment banking business.......was impacted by lower equity trading revenues'. All in all, however, the group is on track for a record year.

Deutsche Bank saw its third-quarter profits rise 25% after one-off gains, but there was a slump in earnings over at the investment banking unit, where profits fell 15% to $1.22bn in the period. A 6% fall-off in sales and trading revenues was down to declines in equities trading of 32%. On the positive side, revenues in investment banking came in on a record high, helped by a strong performance from the European business. Josef Ackermann, Deutsche's CEO, said that 'we are pleased to deliver very solid results, with record third-quarter net income, despite market conditions which were less buoyant than in the third quarter last year'.

In the meantime Lazard posted its third-quarter profits, which came in 32% down at $35m. This represents the first profit fall since the firm's IPO in May 2005. CEO Bruce Wasserstein said that 'we are pleased with the positive momentum across the firm. Our financial advisory business is strong, evidenced by the large number of M&A transactions we have recently announced, and our restructuring group is well positioned for the future. In addition, we have reached an all-time record level of assets under management, at nearly $100bn'.

Finally, UBS. The Swiss bank posted a 21% fall in group third-quarter earnings, coming in at $1.75bn. Profits at the investment bank dropped 22% to $868m in the period, after higher staff costs and a losing bet on US interest rates affected prop trading figures. Clive Standish, the bank's chief financial officer, said that 'we felt the effects of the May and June market correction in the first part of this quarter, as sentimnet did not really improve until September - which is why we were not able to match the very strong performance in the first half'. Deal pipeline, however, is now thought to be strong.

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