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Credit Suisse managed to beat market expectations with its first-quarter earnings on Tuesday, but CEO Tidjane Thiam detailed the challenges the bank is still facing.

It reported a pretax loss of 484 million Swiss francs ($497.85 million) in the first quarter of 2016, compared to a reported pretax profit of 1.51 billion Swiss francs in the same period last year. After tax, the group - Switzerland's second-largest bank - reported a net loss of 302 million Swiss francs, versus forecasts for a 424 million Swiss franc loss, according to a Reuters poll.

In its earnings statement the bank said that it was accelerating its cost savings program to "mitigate (the) impact of adverse market conditions." It said that in the first quarter of the year it had achieved, on an annualized basis, "more than half of the 1.4 billion Swiss francs of net cost savings we are targeting for 2016."

'On an improving trend'

Tidjane Thiam, CEO of Credit Suisse.
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It added that it was confident that it would meet or exceed its target of 1.7 billion Swiss francs of gross cost savings by the end of the 2016. Shares of Credit Suisse opened 5.6 percent lower before turning positive, trading 5.4 percent higher mid-morning on Tuesday.

Speaking to CNBC on Tuesday, Chief Executive Tidjane Thiam said that market conditions had slowly improved since January and February - a period he called "very bad." "We're clearly on an improving trend on a relative basis but we are still below prior levels," he said.

He added that there were a number of highlights in the results.

"There are three things (to highlight). First of all, the profitable growth in the area we targeted for growth: Asia-Pacific, Switzerland and International where, in total, we have more than 14 billion (Swiss francs) in new flows at higher margins, so quality flows and that's very important."

"(Secondly), the execution of the cost-cutting program is going well. We gave a (headcount reduction) target of 6,000 for 2016 and we've done 3500 so we are 58 percent into our program at the end of April."

"Finally, I'd say the capital (core equity tier 1 ratio) of 11.4 percent for us is very satisfactory because clearly we've had a loss in this quarter but to be able to keep a stable CET1 ratio and to absorb that loss is a very pleasing result."

The latest earnings come after an annual general meeting of the bank in Zurich in April to discuss the bank's strategy. Speaking at the meeting then, Thiam warned investors of a tough year ahead and said the bank's share price development in recent months has been disappointing.

Shareholder revolt

The thorny subject of remuneration was also a key talking point at the meeting although the majority of shareholders approved the bank's executive pay packages. Thiam told CNBC on Tuesday that the latest results would be put into context - of first quarter market volatility - by shareholders.

"I never like to speak in the name of the shareholders as my job is to manage the bank and to make them satisfied but I think that, considering the circumstances of the first quarter, this is a very good result. I think institutional investors understand what happened in the fourth quarter and understood what generated the losses."

"The key thing is what we do going forward. We have de-risked our portfolio and … we have now reduced the downside risk in global market by 50 percent, that's what matters and that should give some piece of mind to shareholders."