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Credit Suisse moves further up the profit path

Despite announcing a profit, Credit Suisse is cautious about its outlook Keystone

The Credit Suisse Group has reported a third-quarter net profit of SFr2.045 billion ($1.5 billion), its third consecutive quarterly profit.

The bottom line at Switzerland’s second-largest bank was boosted by the sale of business units, cost cutting measures and the improved financial markets.

The figure compared with a net loss of SFr2.148 billion for the same period a year ago.

CS said in a statement on Tuesday that its Private Banking unit had reported a “strong” net new asset flow of SFr8.4 billion.

However, the Credit Suisse First Boston investment arm had reported lower results compared with the second quarter, mainly reflecting dampened Fixed Income trading revenue, but continued to achieve significant progress on cost reduction.

New assets growth

“I am especially pleased by the good results in Private Banking… At the same time, the strong growth in net new assets reflects our clients’ confidence in our company,” commented Co-CEO of the Credit Suisse Group Oswald Grübel.

Co-CEO John Mack said that CSFB was continuing to make progress towards sustained profitability but cautioned that there was still work to be done.

“Although our strict cost management over the past two years has provided us with a more competitive cost structure, our overall profitability is still not satisfactory as we continue to work through historical issues,” he said.

For the first nine months of 2003, CS reported a net profit of SFr4 billion, compared with a net loss of SFr2.4 billion for the comparable period last year.

The net profit for the third quarter included gains from the divestitures of insurance businesses – Winterthur’s Republic operations in the United States, its Churchill operations in Britain and Winterthur Italy.

“Reasonable numbers…but”

Commenting on the figures, Barclays senior analyst David Hussey pointed out to swissinfo that they did not satsify everybody.

“I think it’s fair to say the numbers are reasonable but I think there were some people in the market expecting slightly better figures in terms of revenues,” he said.

Hussey added that he believed the CS Group was now back on track after last year’s dismal performance.

“I think it’s probably fair to say that the worst is definitely over and these results bear that out quite strongly…that the future looks pretty healthy for this company.”

“But what the company has to prove is that its performance is going to be sustainable and not as volatile as it has been in recent years,” he added.


In its outlook, CS took a rather cautious line, commenting only that it would concentrate on “enhancing efficiency” and building up its client base.

The group remained focused on achieving profitability, the statement said.

After making a loss last year of SFr3.3 billion, a record for a European bank, CS has been pulling itself out of the woods this year. But it has been a painful process.

Since January full-time staff numbers in the group have fallen by 22 per cent from 78,457 to 61,332.

Although more costs cuts are in the offing, chief financial officer Phil Ryan said that no more major staff cuts were planned.

“Cost control continues to be a very high priority across the group. We are done with the announced big headcount programmes, but there is still more cost reduction in all units to be done,” he said.

swissinfo with agencies

The CS Group made a loss of SFr3.3 billion last year.
Since January, full-time staff numbers have fallen from 78,457 to 61,332.
Switzerland’s largest bank UBS announces its third-quarter figures on Tuesday next week.

The Credit Suisse Group has made a third-quarter net profit of SFr2.045 billion.

For the first nine months, the Group has made net income of SFr4 billion.

CS Private Banking reported new net asset flow of SFr8.4 billion for the third quarter.

Credit Suisse First Boston CEO John Mack commented that there is still “work to be done” at the investment unit.

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