SWITZERLAND - Costs of CHF152m associated with the realignment of Credit Suisse Group's asset management business blighted the division's performance in the second quarter of 2006.
Asset management generated CHF27m in Q2, down 92% compared to the second quarter of 2005.
The division's net revenues also declined 14% to CHF675m, compared to the previous year’s quarter, mainly due to lower investment-related gains.
Chief executive officer Oswald J. Grübel (pictured) said the firm had recently conducted a global strategic review of asset management and identified a number of measures to be implemented.
These included repositioning the asset management business by reshaping the product offering, improving sales and investment processes and lowering the overall cost base.
Going forward, the US business will focus on growth areas such as enhanced index, quantitative strategies and structured products, as well as on its current strengths, including alternative investments and core competencies in other equity and fixed income strategies.
Asset Management reported CHF15.5bn of net new assets in Q206, driven mainly by US-based money market products, alternative investments and multi-asset class solution products.
Overall, the group recorded CHF30.1bn of net new assets in the quarter.
Total AuM were CHF1,370.9bn as of June 30, 2006, a decrease of 1.8% from 31 March 2006. The group said this reflected adverse market and foreign exchange-related movements, offset in part by net new assets.
Net income was CHF4.762bn for the first half of 2006, compared to CHF2.829bn for the first half of 2005.
Net income for Q2 was CHF2.158bn, compared to net income of CHF919m in Q2 2005.
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