Profit soars at Credit Suisse

CS has said it's "optimistic" for the year as a whole Keystone

Credit Suisse, Switzerland’s second-largest bank, confirmed on Wednesday that its first-quarter profit had jumped more than sixfold to SFr1.86 billion ($1.45 billion).

The rise was attributed to strong gains in wealth management fees and trading income.

Chief financial officer Phil Ryan commented that the first quarter had marked the bank’s strongest operating performance since 2000, adding that it was “a great start to the year”.

Its larger rival, UBS, on Tuesday reported that its first-quarter net profit had risen to a record SFr2.42 billion, double that of a year ago.

Profit at Credit Suisse Financial Services, which includes private banking, retail banking and the Winterthur insurance business, rose to SFr1.1 billion from SFr126 million the previous year.

New assets

The private banking business alone reported an inflow of SFr10.8 billion in net new assets in the January to March period. Total new net assets for the banking group were SFr15.6 billion.

“The group delivered a strong performance in the first quarter, with revenue growth driven by higher levels of client activity and more favourable economic conditions,” commented co-chief executives Oswald Grübel and John Mack.

Mack, who is head of the group’s investment arm, Credit Suisse First Boston, said that CSFB had achieved strong revenue growth across a range of businesses and regions.

CSFB generated SFr759 million of the group’s net profit,

In its outlook, CS said the group had started the year “successfully”, benefiting from progress achieved in all its businesses and improved economic conditions.

Optimism for 2004

It added that the group remained “optimistic” about 2004, given present levels of client activity and the current economic climate. It did not give a more detailed assessment.

CFO Ryan cautioned that the bank was unlikely to repeat its solid first-quarter performance. UBS also gave a similar warning when it presented its figures.

“We have benefited from good market conditions and good trading markets,” he said. “It does not look like the rest of the year is going to pan out like the first quarter, but we are optimistic.”

He added that the second quarter had started well but that the group had seen some slowdown from the first three months of the year.

The January to March period was the first quarter in which Credit Suisse calculated its earnings according to United States rather than Swiss accounting rules.

The changeover cut 2003 net profit by a hefty SFr4.2 billion to SFr770 million.

Credit Suisse revised its 2003 earnings down around SFr200 million in March after admitting an accounting error.

swissinfo with agencies

Key facts

Credit Suisse is Switzerland’s second-largest bank after UBS.
At the end of March it had assets under management of SFr1.24 trillion.
The group employs around 60,000 people worldwide.

In brief

First-quarter net profit at Credit Suisse has risen to SFr1.86 billion ($1.45 billion) from SFr279 million a year ago.

Total group net new assets were SFr15.6 billion.

The group is optimistic for 2004 but cautions that the present favourable market conditions are not likely to continue.