SWITZERLAND - Swiss Life has posted a massive 86.6% drop in profits for 2001, a result the firm chief executive officer Roland Chlapowski described as "satisfactory".
Swiss Life recorded a consolidated profit of CHF124m for 2001, compared to the CHF924m posted the year before. In a statement, the firm said: “Consolidated profit of CHF124m can be described as satisfactory in view of the negative stock exchange year. This is even more so the case as, under IAS, an increase of the allowance for impairment losses of CHF760m was made.”
Despite the poor result, Swiss Life claims that following it is on course to achieve sustainable and continued growth of profits in 2002, “just as in the previous years”.
Swiss Life believes that it can achieve its aim of boosting the profitability of all its business units and to optimise the balance sheet and increase equity capital. It will do this via a combination of job cuts, cost savings and a reorganisation of its BVG business - the compulsory private pension fund in Switzerland.
The firm’s strategic reassessment - launched in January - will determine which business areas and in which main markets it plans to operate in the future. Swiss Life claims that activities are already well underway and that the results will be announced soon.
Before the strategic review was announced, the firm had already announced that it would be immediately undertaking a series of cost cutting measures, measures it claimed will save CHF300m by the end of 2003. To that end, 800 of its staff was made redundant.
Despite the gloom, Swiss Life’s asset management divisions performed exceptionally well, posting a 52.6% rise in profits. Last year, asset management recorded profits of CHF148m, compared to the CHF97m in 2000. Asset management was the only business unit that saw an increase in profits - every other operating area saw double digit falls in profits.
Overall, assets under management totalled CHF 115.3 billion, of which CHF15.6bn was attributable to assets managed for third parties. A total of CHF4.5bn in new funds was acquired.
By Geoffrey Ho
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