ZURICH (Reuters) - Credit Suisse CSGN.S posted its highest quarterly earnings in four years on Wednesday, hailing frugal cost management as paying off in a tough environment.

FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at a branch in Winterthur, Switzerland November 2, 2017. REUTERS/Arnd Wiegmann/File Photo

Switzerland’s second-biggest bank raised earnings 45% in the second quarter through June, well beyond expectations, as costs continued to come down half a year after it wrapped up a three-year overhaul.

“Part of our strategy has been to reduce our fixed costs very heavily, and I think we did that at the right time,” Chief Executive Tidjane Thiam said.

“Our view from the start was that it’s always going to be a stagnant industry, so we had to take our cost down very severely,” Thiam told Bloomberg TV.

“We’re also lucky because we came out with that new platform just at the time when many others are restructuring, and we’re benefiting from that,” Thiam added.

Credit Suisse shares, which had dropped on Tuesday to their lowest in a month, rose 5% by 0829 GMT, with analysts noting a clear beat in Global Markets, the capital-heavy trading division which the bank downsized during its overhaul, and solid inflows of fresh client money, an indicator of future earnings for private banks.

“We view these as strong results,” Citi analysts wrote in a note. “Global Markets has been the main cause of consensus earnings downgrades over the past 18 months, but has now shown signs of recovery for a second consecutive quarter.”

GEOPOLITICAL TWISTS

The Zurich-based lender’s revenue remained largely flat during the quarter, with a jump in trading income helping offset a slide in its corporate advisory business.

The bank nonetheless confirmed its ambitions this year to reach a return on tangible equity (RoTE) of between 10% and 11% - double the 5.5% it hit in 2018 - which it aims to achieve through reduced costs and lower tax rates, and which assumes flat revenue for the year.

Geopolitical twists have created a rocky backdrop for private and investment banks, with transaction levels and client sentiment susceptible to uncertainties ranging from central bank rate cuts to Chinese-U.S. trade relations and Brexit.

Rival UBS UBSG.S last week posted a 1% net profit rise as strength in its Swiss business helped offset weakness in wealth management. Tepid trading from wealthy clients saw adjusted profit slide 19% at Julius Baer BAER.S.

At Credit Suisse a 937 million Swiss franc ($945.5 million) net profit was well ahead of the bank’s own consensus for 788 million francs.

Revenues from equity sales and trading rose 3%, with management pointing to further gains in market share. Fixed-income sales and trading revenues rose 11%, both ahead of peers.

The bank gave a mixed outlook, saying it had seen healthy levels of client engagement thus far in the third quarter, but adding market conditions would impact whether that engagement ultimately translated into a pickup in activity.