SWITZERLAND - Global financial services giant Credit Suisse Group (CSG) saw Q2 profits drop by 7%, compared to both the second quarter of 2000 and the previous quarter.
CSG posted a net operating profit of CHF1.6bn in Q2 of 2001. Net operating profit for the first half of 2001 totalled CHF 3.3bn, down 9% year-on-year.
However, total AUM grew by 4.3% to CHF1,452.1bn since year-end 2000, with a net inflow of new assets of CHF 41.4bn or 3%. Credit Suisse Asset Management’s 1H revenues were up 10% over 2000 to CHF 827m. Net new asset growth slowed in Q2. Assets under management rose 3.3% in the first six months of 2001, to CHF 503.4 billion. The unit contributed CHF 8bn in net new assets,
CSG commented that results were good in a “challenging” market:
“Credit Suisse Group achieved good results in the second quarter of 2001 across all of our business units in the light of the continued challenging market environment, which contrasted sharply to the positive market developments in 2000. These results include very strong development of net new assets during the second quarter and the first half of the year and progress in terms of cost reduction, demonstrated by lower personnel expenses as compared with the first quarter”, said Lukas Mühlemann, the firm’s chairman and chief executive officer.
He added: “Going forward, we expect the world’s economic climate and the situation in the global financial markets to be difficult in the third and fourth quarters, affecting our core activities in the areas of asset gathering and investment banking.”
Other 1H results included Credit Suisse Private Banking’s AUM rising 7.2% to CHF 489.1bn; while Credit Suisse Financial Services achieved a 1.7% growth in AUM o CHF 278.4bn and reported CHF 3.5bn in net new assets. The firm’s investment banking arm Credit Suisse First Boston contributed CHF 9.4bn to the Group’s net new assets, with growth in AUM of 3.8% to CHF181.2bn.
CSG subsidiary Winterthur Life & Pensions recorded 10% premium growth in the first half of 2001 and a rise in net operating profit of 43%, to CHF 413m.
The firm said that all units would focus on expense control into 2002. CSFB has already slashed 524 jobs - 2% of its workforce - since March 2001.
In July CSG appointed John Mack as chief executive officer of Credit Suisse First Boston and vice-chairman of the group executive board. On January 1, 2002, Credit Suisse Asset Management will be combined within (Credit Suisse First Boston), and Credit Suisse Private Banking with Credit Suisse Financial Services (Credit Suisse Financial Services).
The company also reported that Thomas Schmidheiny would retire from CSG’s board of directors. He first joined the former Schweizerische Kreditanstalt in 1982.
*Results include figures from Donaldson, Lufkin & Jenrette. By Madhu Kalia
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