Navigation

Credit Suisse profit surges

The skies have begun to clear for Credit Suisse Group Keystone

The Credit Suisse Group has posted a first-half net profit of nearly SFr2 billion ($1.48 billion) - well up on last year’s SFr211 million loss for the same period.

This content was published on August 5, 2003 - 08:14

Net profit in the second quarter of 2003 was SFr1.3 billion, far exceeding analysts’ expectations.

However, Switzerland's second-biggest financial services group said on Tuesday that operating income dropped to SFr14.5 billion, down nine per cent compared with the first six months of last year.

But operating expenses were slashed by nearly a quarter to just over SFr10 billion. Credit Suisse announced earlier this year that it was shedding 1,250 jobs.

According to Phil Ryan, CSG's chief financial officer, the latest profits were the result of the ongoing reorganisation at Credit Suisse. "We're delivering the turnaround as promised," he said.

Another member of the group executive board, Barbara Yastine, who is chief financial officer of investment arm Credit Suisse First Boston, was also upbeat.

"The most gratifying part of our performance has really been that all parts of the business have performed better," she told swissinfo.

She shrugged off the comparative fall in operating income.

"The best prediction of the future is the most recent quarter. I think looking at the trends we've had in the past three quarters is actually more meaningful in understanding where we are likely to be over the next four quarters than looking back a year ago," she commented.

Unexpected profits

At the group's Financial Services division, which includes private and retail banking, net income was SFr829 million for the second quarter, a 21 per cent increase from the first quarter.

Profit at the New York-based Credit Suisse First Boston investment-banking division more than tripled to $296 million from $61 million.

Analysts had expected Credit Suisse to announce a profit of around SFr750 million for the second quarter. Last year, the group reported a loss of SFr579 million for the same period.

Credit Suisse recorded its biggest deficit ever in 2002, losing SFr3.3 billion - the worst result in the institution’s 150-year history.

But its fortunes began to turn around this year, with a first-quarter profit of SFr652 million.

Sell Winterthur?

It repeated its outlook for "solid" and "sound" profits for the year, adding that it remained cautious due to financial market uncertainty.

Ryan said the group was remaining focused on a turnaround in earnings and was not considering big strategic mergers.

But he seemed to hint that its Winterthur insurance arm, which has been shedding units as it attempts to return to profitability, could be sold.

"Like any company, we want to explore all the opportunities that would increase value to shareholders," he said.

However, a later CS statement quoted him as saying that the group had no plans to sell off the unit.

The group's insurance business did pick up during the first half of the year, contributing a profit of SFr422 million, compared with a billion franc loss for the same period last year.

Lower costs, better financial results at the stock market and higher premiums all contributed to the better results.

CSG also announced on Tuesday that it had sold its stake in insurer Swiss Life, netting SFr50 million in the process. Previously, Credit Suisse had reduced its shareholding in Swiss Life below five per cent.

swissinfo with agencies

Key facts

Operating income first semester 2003: SFr14.573 billion.
Operating expenses: SFr10.091 billion.
Net profit: SFr1.998 billion.

End of insertion

This article was automatically imported from our old content management system. If you see any display errors, please let us know: community-feedback@swissinfo.ch

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative

Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.

Share this story

Change your password

Do you really want to delete your profile?