CS reports its businesses are flourishing
Net profit at the Credit Suisse Group is continuing to surge, driven by investment banking and wealth management.
Switzerland’s second-largest bank on Tuesday reported a first quarter net profit of SFr2.6 billion ($2.10 billion), up 36 per cent compared with the comparable period last year.
Net new assets totalled SFr31.1 billion.
“Positive market sentiment translated into strong client activity across our investment banking, private banking and asset management divisions and we were well positioned to benefit from favourable trading conditions,” commented chief executive Oswald Grübel.
The group’s investment banking unit reported record income from continuing operations before taxes of SFr1.564 billion in the first quarter, an increase of 68 per cent compared with the first three months of 2005.
The wealth management business – a part of private banking – reported similar income of SFr963 million, up 50 per cent from the first quarter of 2005.
Drivers
“At first glance, I think it’s an excellent result. Wealth management and the investment bank are the clear drivers,” said analyst Claudia Meier at Bank Vontobel in Zurich.
She added that Credit Suisse’s Winterthur insurance arm also showed a strong result.
Winterthur, which is due to be floated in the second half of this year, reported net revenue of SFr10.915 billion, a rise of 71 per cent from the fourth quarter of 2005 and 15 per cent from the first quarter of last year.
Grübel commented that the group was committed to enhancing efficiency and productivity to “capture the full value” of the business.
CS’s chief financial officer, Renato Fassbind, declined to comment on the planned Winterthur flotation.
Restructuring
Some analysts estimate the value of Winterthur, which has gone through a long and painful restructuring, at SFr11 billion.
Fassbind was more forthcoming on the performance of the wealth management business.
“We had particularly good inflows [into wealth management] in Europe, in the United States and from Switzerland,” he commented.
Credit Suisse last week said it would merge four private banks and a securities dealer to create a new operation called Clariden Leu.
If approved, Clariden Leu will become the fifth largest private bank in Switzerland, created specifically to manage the wealth of rich clients, particularly in Asia.
swissinfo with agencies
First quarter 2006:
Net revenues: SFr21.779 billion
Net income: SFr2.604 billion
Net new asssets: SFr31.1 billion
Credit Suisse this year realigned its reporting structure to reflect the launch of the new integrated global bank.
Under the new structure, the group has a separate reporting segment for each of its banking divisions – investment banking, private banking and asset management – and a single reporting segment for its Winterthur insurance business.
Credit Suisse is celebrating its 150th anniversary this year.
Alfred Escher founded the Schweizerische Kreditantstalt (Swiss Credit Bank) in 1856 as a vehicle to push forward the expansion of the railway network and industrialisation in Switzerland.
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