ZURICH (Reuters) - Credit Suisse posted its worst start to a year since the financial crisis amid a major restructuring but cost cuts, a healthy performance in private banking and robust capital levels offered investors much-needed comfort.

Chief Executive Tidjane Thiam of Swiss bank Credit Suisse speaks to the media during a news conference in Zurich, Switzerland May 10, 2016. REUTERS/Ruben Sprich

Switzerland’s second biggest bank has struggled in recent months as tough financial markets complicated Chief Executive Tidjane Thiam’s strategy to focus on wealth management and slim down the investment bank.

On Tuesday, Credit Suisse posted a 302 million Swiss franc ($311 million) loss for the first three months of 2016, the Zurich-based bank’s second consecutive quarterly loss.

Earlier warnings from Thiam that 2016 would be a difficult year had prepared investors for the worst, with the average forecast from nine analysts polled by Reuters for a 424 million franc loss.

Shares rose as much as 6.4 percent when the loss came in lower than that.

“There’s obviously been a lot of fear surrounding Credit Suisse,” said Macquarie Research analyst Piers Brown, who has an “outperform” rating on the stock. “It’s more a relief rally than anything else today.”

Thiam, who took over at Credit Suisse in July from British insurer Prudential, has set about scaling back the investment banking business, which has more volatile earnings and is subject to more stringent regulation.

He is banking on managing the world’s wealth through three regional units -- Asia Pacific, Switzerland and international wealth management -- to spearhead a turnaround.

Investors were cheered by roughly 14 billion francs in net new money inflows -- seen as an important indicator of future earnings in wealth management -- at the three divisions, which all posted pre-tax profits.

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Thiam had previously described January and February as “two of the worst months ever in international markets” and said conditions would remain tough but he offered a slightly more optimistic view on Tuesday.

“If things did not move from what we’ve seen up to now, to today, I think the (second quarter) result would be better than in Q1,” Thiam told analysts.

“PROBABLY NOT THE TURNING POINT”

The bank said it was confident it could meet or beat a 1.7 billion franc cost saving target by year-end and said more than 1,000 jobs had been cut in its restructuring of global markets, one of two investment banking divisions.

Credit Suisse posted an unchanged common equity tier 1 capital ratio, a measure of its financial strength and a metric which fell at many rivals in the quarter.

Some analysts stopped short of saying Credit Suisse had put the worst of the restructuring behind it.

“It’s probably not the turning point yet because they are in the middle of the whole restructuring,” said Zuercher Kantonalbank analyst Andreas Brun.

Earnings were blighted by further losses at the investment banking divisions, especially global markets which have faced restrained client trading and taken write-downs on certain trading positions.

The earnings come almost seven weeks after Credit Suisse disclosed painful write-downs on certain market positions, sparking confusion over how much bank bosses knew about its trading business.

Chief Financial Officer David Mathers said in an interview that the positions were correctly valued and within risk systems but the concern was that the bank’s risk appetite had not yet been properly realigned with the new strategy.

Thiam said on March 23 it had been unacceptable that he and his CFO could be surprised by the size of the bank’s illiquid trading book.

Asked about the statements that he was unaware of the size of the positions, Mathers said: “I’m not going to add to my comments I’ve made already. I didn’t say that on the 23rd so I’m not going to add to my comments.”