ZURICH, Switzerland, May 4, 2005 (PRIMEZONE) -- Credit Suisse Group today reported net income of CHF 1,910 million for the first quarter of 2005, compared to CHF 1,861 million in the first quarter of 2004. A continued strong performance from Private Banking and a record quarter for Corporate & Retail Banking contributed to this result. Institutional Securities reported lower net income and had a mixed quarter, with increased revenues in fixed income trading and lower results in equity underwriting and trading as well as in debt underwriting and advisory versus the strong first quarter of 2004. Wealth & Asset Management reported net income which was largely unchanged compared to the first quarter of 2004. Winterthur recorded a solid first-quarter performance, especially in Non-Life, which further improved its underwriting results. Life & Pensions reported moderate growth in its total business volume. The return on equity was 22.9% for the banking businesses and 12.0% for Winterthur. Credit Suisse Group's overall return on equity was 20.6% for the first quarter.
Credit Suisse Group has received the requisite regulatory approvals from the Swiss Federal Banking Commission to merge its two Swiss banks, Credit Suisse and Credit Suisse First Boston. As previously announced, the merged bank will be operational from May 16, 2005, and will continue to use the Credit Suisse, Credit Suisse First Boston and Credit Suisse Asset Management brands.
Oswald J. Grubel, CEO of Credit Suisse Group, said, "With solid revenues and good net income, Credit Suisse Group has made a strong start to 2005. Private Banking had another excellent quarter and Corporate & Retail Banking reported a record result."
He continued, "While showing an improvement over the previous quarter and gaining market share in some key businesses, the results from Institutional Securities were mixed. Wealth & Asset Management achieved some progress but still has the potential to improve further. We will continue to implement our strategy, which is designed to rebuild a leadership position in these businesses."
Turning to the insurance business, he added, "Winterthur produced a solid performance in the first quarter, especially in Non-Life - which further improved its underwriting results - as the insurance business benefited from increased business volumes and reduced expenses. Going forward, we will continue to work to enhance profitability at Winterthur."
He concluded, "We continue to focus on improving performance and on the integration of our banking businesses and we still have more work to do. My management team and I strongly believe that by creating an integrated bank, we will be able to further improve client service, generate revenue growth and improve efficiency. This will help us to build our position as a leading global financial services provider."
Banking Segments
Private Banking reported an 11% increase in net income to CHF 685 million in the first quarter of 2005 compared to the previous quarter, as a further recovery in client activity led to sound revenue growth. The segment was able to repeat the strong performance of the first quarter of 2004. The gross margin improved by 9.5 basis points to 137.7 basis points versus the previous quarter but was down 8.6 basis points from the first quarter of 2004. Private Banking's cost/income ratio improved by 2.4 percentage points to 55.4% compared to the previous quarter and was virtually unchanged compared to the corresponding period of 2004.
Corporate & Retail Banking recorded net income of CHF 274 million for the first quarter of 2005, up 7% compared to the fourth quarter and up 45% versus the first quarter of 2004. This result mainly reflects sound revenues and a seasonally low cost base, as well as a net release of provisions for credit losses. Corporate & Retail Banking reported a return on average allocated capital of 22.4%, up 1.6 percentage points from the fourth quarter and up 7.3 percentage points versus the first quarter of 2004. At 61.5%, the cost/income ratio was 2.1 percentage points higher than in the previous quarter and improved by 1.3 percentage points versus the first quarter of 2004.
Institutional Securities generated net income of CHF 540 million in the first quarter of 2005, a 101% increase from the previous quarter. This performance was characterized by a 32% increase in revenues - reflecting higher fixed income and equity trading results and lower investment banking results - and a 14% rise in total operating expenses. Compared to the strong first quarter of 2004, net income declined 13%, due in part to lower revenues. Although fixed income trading results improved versus the prior-year period, revenues in equity trading and underwriting and in debt underwriting and advisory declined. Total operating expenses were down 3% versus the first quarter of 2004. The segment's pre-tax margin (excluding minority interests) improved to 19.9% in the first quarter from 13.7% in the fourth quarter of 2004 but was down from 22.2% in the first quarter of last year.
Wealth & Asset Management reported net income of CHF 135 million for the first quarter of 2005, representing a 114% rise from the previous quarter. This first-quarter performance reflected stable revenues in Credit Suisse Asset Management, lower revenues in Private Client Services and lower fees in Alternative Capital, offset by higher investment-related gains and a decrease in total operating expenses. Compared to the first quarter of 2004, net income declined by 1%, reflecting lower revenues from Credit Suisse Asset Management and Private Client Services as well as lower investment-related gains, offset in part by an increase in fees from Alternative Capital and lower expenses. Insurance Segments Life & Pensions recorded net income of CHF 126 million in the first quarter of 2005. This 9% decrease compared to the first quarter of 2004 was primarily due to lower investment income from net realized gains, partially offset by improvements in the segment's underlying business. Total business volume, which includes deposits from policyholders and gross premiums written, rose 7% compared to the first quarter of last year. This growth was mainly driven by a 7% increase in gross premiums written. Insurance underwriting and acquisition expenses decreased 12% and administration expenses rose 9% compared to the first quarter of last year. The expense ratio decreased by 0.3 percentage points to 6.3%. In the first quarter of 2005, the net investment return backing traditional life policies was down from 5.6% to 5.3% and the net current investment return remained stable at 3.8%.
Non-Life reported net income of CHF 125 million for the first quarter of 2005, up 21% compared to the first quarter of 2004. This increase was mainly attributable to further improvements in the segment's underwriting results and reduced charges for divested operations. Net premiums earned declined 3% in the first quarter of 2005 and the combined ratio improved by 1.0 percentage points to 99.4% compared to the same period of last year. The claims ratio decreased by 1.6 percentage points to 75.3% in the period under review, mainly reflecting a lower level of large-scale losses and improvements in several market units. Administration expenses decreased 5%, while insurance underwriting and acquisition expenses rose by 3% in the first quarter of 2005. The expense ratio increased by 0.6 percentage points, due primarily to a decrease in net premiums earned. Non-Life's net investment return decreased slightly from 5.1% to 5.0% and the net current investment return remained stable at 3.5% compared to the same period of 2004.
Net New Assets
Private Banking generated net new assets of CHF 7.0 billion in the first quarter of 2005, representing an annualized growth rate of 5.2% - with strategic key markets in Asia and Europe again reporting double-digit growth rates. Wealth & Asset Management reported net new assets of CHF 5.1 billion due mainly to corporate and client cash inflows as well as inflows related to the launch of a new real estate fund in Europe. Overall, Credit Suisse Group reported CHF 15.4 billion of net new assets in the first quarter. The Group's total assets under management stood at CHF 1,271.6 billion as of March 31, 2005, up 4.2% from December 31, 2004.
Outlook
Following the generally more favorable business climate in the first quarter, Credit Suisse Group expects to see market activity slow considerably in the second quarter. These less buoyant market conditions are likely to result in more subdued client activity - bringing with it a corresponding decrease in business volumes. However, the Group expects market conditions to improve in the second half of 2005. Credit Suisse Group will concentrate on diligently responding to these trends to capture growth opportunities and on ensuring it has the necessary measures in place to respond rapidly to changing client requirements.
For additional information on Credit Suisse Group's results for the first quarter of 2005, please refer to the Group's Quarterly Report Q1 2005, as well as the Group's slide presentation for analysts and the press, which are available on the Internet at: www.credit-suisse.com/results
Credit Suisse Group
Credit Suisse Group is a leading global financial services company headquartered in Zurich. It provides private clients and small and medium-sized companies with private banking and financial advisory services, and pension and insurance solutions from Winterthur. In the area of investment banking, it serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland and in the form of American Depositary Shares (CSR) in New York. The Group employs around 60,000 staff worldwide. As of March 31, 2005, it reported assets under management of CHF 1,271.6 billion.
Cautionary Statement Regarding Forward-Looking Information This press release contains statements that constitute forward-looking statements. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to our plans, objectives or goals; our future economic performance or prospects; the potential effect on our future performance of certain contingencies; and assumptions underlying any such statements. Words such as "believes," "anticipates," "expects," "intends" and "plans" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable laws. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include (i) market and interest rate fluctuations; (ii) the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations in particular; (iii) the ability of counterparties to meet their obligations to us; (iv) the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; (v) political and social developments, including war, civil unrest or terrorist activity; (vi) the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations; (vii) the ability to maintain sufficient liquidity and access capital markets; (viii) operational factors such as systems failure, human error, or the failure to properly implement procedures; (ix) actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations; (x) the effects of changes in laws, regulations or accounting policies or practices; (xi) competition in geographic and business areas in which we conduct our operations; (xii) the ability to retain and recruit qualified personnel; (xiii) the ability to maintain our reputation and promote our brands; (xiv) the ability to increase market share and control expenses; (xv) technological changes; (xvi) the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users; (xvii) acquisitions, including the ability to integrate successfully acquired businesses; (xviii) the adverse resolution of litigation and other contingencies; and (xix) our success at managing the risks involved in the foregoing. We caution you that the foregoing list of important factors is not exclusive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, as well as the risks identified in our most recently filed Form 20-F and reports on Form 6-K furnished to the US Securities and Exchange Commission. Presentation of Credit Suisse Group's First Quarter Results 2005 via Webcast and Telephone Conference
Date Wednesday, May 4, 2005
Time 10 CEST / 9 BST / 4 EST
Speaker Renato Fassbind,
Chief Financial Officer of Credit Suisse Group
The presentation will be held in English.
Webcast www.credit-suisse.com/results
Telephone Europe: +41 91 610 5600
UK: +44 207 107 0611
USA: +1 866 291 4166
Reference: 'Credit Suisse Group quarterly results'
Q&A You will have the opportunity to ask questions during the
telephone conference following the presentation.
Playback Audio recording - available approximately three hours
after the event at: www.credit-suisse.com/results
Telephone - available approximately one hour after the event;
please dial:
Europe: +41 91 612 4330
UK: +44 207 108 6233
USA: +1 866 416 2558
Conference ID: 122#
Note We recommend that you dial in approximately ten minutes
before the start of the presentation for the webcast and
telephone conference. Further instructions and technical
test functions are now available on our website.
The full press release including tables can be downloaded from the following link: http://hugin.info/100174/R/992787/149976.pdf