Profits plunge at Credit Suisse

Mühlemann gestures during Tuesday's press conference Keystone

The Credit Suisse Group has announced a 73 per cent drop in net profit for 2001.

Overall net profit fell from SFr5.8 billion in 2000 to SFr1.6 billion last year, the banking group said in a statement released on Tuesday.

Lukas Mühlemann, chairman and CEO of the group, admitted the past twelve months had been difficult for the company.

“Clearly, the global economic climate made 2001 a challenging year for the Group, as well as for the entire financial services industry,” Mühlemann commented in response to the figures.

“However, our company’s fundamentals remain strong and our asset management business achieved solid profitability and growth,” he added.

Shares in the Credit Suisse Group fell slightly when the market opened on Tuesday, from SFr63.05 to SFr62.

Fall in net operating profit

Net operating profit for the group fell by 45 per cent to SFr4 billion in 2001, figures which Credit Suisse said were in line with forecasts made at the end of January.

The company, which runs Switzerland’s second-biggest domestic bank, said its investment-banking arm, Credit Suisse First Boston (CSFB), also reported a 78 per cent drop in net operating profit to SFr571 million ($338 million).

A restructuring and cost reduction programme is currently being implemented at CSFB.

“At Credit Suisse First Boston, we made significant progress in enhancing the firm’s competitiveness in key financial markets,” Mühlemann said, “although our short-term results were negatively impacted by the difficult markets and some of the measures we took to reduce our cost base.”

The company said it would use its Annual General Meeting in Zurich to propose offering a par value reduction of SFr2 per share in lieu of a dividend.

Profits down at Winterthur

Overall net operating profit for 2001 also fell at Winterthur Insurance, which is wholly owned by the Credit Suisse Group.

The insurance company said profits for 2001 stood at SFr536 million, down from SFr745 million the previous year.

But Winterthur did register a 12 per cent rise in its gross premium volume, from SFr16.5 billion to SFr18.4 billion.

In a statement released on Tuesday, the insurer said acquisitions in Belgium and in Britain had “significantly strengthened” its position in these markets.

swissinfo with agencies