ZURICH, Switzerland, Feb. 17, 2005 (PRIMEZONE) -- Credit Suisse Group:
- All banking businesses report year-on-year profit improvements
- Very good results in Private Banking and Corporate & Retail Banking
- Improved revenues and margins at Credit Suisse First Boston
- Solid full-year performance at Winterthur
- Board of Directors to seek authorization from the AGM for two-year share repurchase program for a value of up to CHF 6 billion
Fourth quarter results include: additional provisions for the sale of Winterthur International in 2001, CHF 242 million; loss on disposal of a minority holding, CHF 148 million; severance costs at CSFB, CHF 112 million (all after tax).
Credit Suisse Group today reported net income of CHF 5,628 million for the full year 2004, compared to net income of CHF 770 million for 2003. Its fourth quarter 2004 net income was CHF 959 million, compared to net income of CHF 1,351 million in the previous quarter and CHF 784 million in the fourth quarter of 2003. Net income for 2004 was impacted by a charge of CHF 242 million after tax in the fourth quarter (CHF 310 million before tax) for the increase in the provision relating to contingencies arising from the sale of Winterthur International in 2001, the loss on the disposal of a minority holding in Warburg Pincus of CHF 148 million after tax (which includes a foreign exchange loss of CHF 125 million already recognized earlier as a reduction to equity) and severance costs of CHF 112 million after tax associated with changes in the business structure of Institutional Securities and Wealth & Asset Management.
Good performances from Private Banking and Corporate & Retail Banking in the fourth quarter contributed to a very good full-year result. Credit Suisse First Boston continued to improve its financial performance in the fourth quarter and recorded an increased pre-tax margin for the full year 2004 versus 2003, as Institutional Securities and Wealth & Asset Management reported moderate revenue growth and maintained cost discipline with a compensation to revenue ratio (excluding minority interests related to revenues) of 53.1% for 2004.
Winterthur achieved a solid performance in 2004, driven by improved underwriting results -- reflecting cost containment efforts and efficiency gains -- and stable investment income, partially offset by the aforementioned provisioning.
The Board of Directors will propose a dividend of CHF 1.50 per share and will also seek authorization for a two-year share repurchase program for a value of up to CHF 6 billion from the Annual General Meeting on April 29, 2005.
Oswald J. Grubel, CEO of Credit Suisse Group, stated, "We delivered a good 2004 result as our businesses responded well to the changing market environment but the fourth quarter was impacted by provisions relating to the sale of Winterthur International, a loss on the disposal of a minority holding and severance costs at CSFB. However, I am very pleased that all our banking units reported increased profitability compared to 2003, while significant year-on-year improvements show that Winterthur is making continued progress towards sustained profitability. Moreover, the strengthening of our capital base as a result of our good 2004 performance will enable us to fund our growth strategy and return capital to our shareholders."
He continued, "These positive results confirm that we are establishing real momentum and consistency but we still have some way to go to realize the full potential of the Group. To do this, we will be relentless in the execution of our strategy and we will strengthen cooperation between our businesses to capture opportunities for revenue growth and cost synergies."
He concluded, "We are confident that the integration of our banking businesses announced in December will transform the Group into a stronger and more formidable competitor in the global marketplace." Equity Capital Credit Suisse Group further increased its momentum in capital generation in 2004 and reported a consolidated BIS tier 1 ratio of 12.3% as of December 31, 2004.
Credit Suisse Business Unit
Private Banking reported net income of CHF 616 million for the fourth quarter of 2004, up 21% versus the third quarter, due primarily to higher transaction-driven income which reflected a slight recovery in client activity. Compared to the fourth quarter of 2003, which benefited from disposal gains of CHF 81 million after tax, net income declined 2%. For the full year 2004, Private Banking posted net income of CHF 2,473 million. This 28% increase versus 2003 was mainly attributable to strong asset-driven revenue generation and efficiency improvements. The gross margin rose to 128.2 basis points in the fourth quarter of 2004 from 121.7 basis points in the prior quarter and stood at 133.7 basis points for the full year 2004, virtually unchanged from the high level in 2003. The cost/income ratio amounted to 57.8% for both the fourth quarter and full year 2004, representing an improvement of 3.8 percentage points versus the full year 2003, primarily as a result of higher revenues.
Corporate & Retail Banking recorded net income of CHF 257 million for the fourth quarter of 2004, representing an increase of 29% over the third quarter and a substantial increase from the corresponding period of 2003. Full-year 2004 net income totaled CHF 901 million, up 54% from 2003, driven by an increase in commission and fee income, efficiency improvements and a low level of credit provisions. In the fourth quarter of 2004, provisions for credit losses decreased by CHF 26 million from the third quarter and resulted in a net release of CHF 6 million of provisions, reflecting the favorable credit environment. For the full year 2004, provisions for credit losses amounted to CHF 122 million, down 69% from 2003. The segment's return on average allocated capital was 20.8% for the fourth quarter and 18.0% for the full year 2004, up 6.3 percentage points from 2003. Credit Suisse First Boston Business Unit Institutional Securities reported net income of CHF 269 million for the fourth quarter of 2004, down 8% from the third quarter, which was positively impacted by lower income tax expense. Compared to the fourth quarter of 2003, net income rose by CHF 173 million, positively impacted by lower credit provisions and lower income tax expense and negatively impacted by severance costs of CHF 68 million before tax. For the full year 2004, net income rose 47% versus 2003 to CHF 1,313 million due to higher fixed income and equity trading results, higher debt underwriting revenues, gains on legacy investments, lower credit provisions and lower income tax expense. The pre-tax margin (excluding minority interests) in the fourth quarter improved compared to both prior periods and was flat for 2004 compared to 2003.
Wealth & Asset Management reported net income of CHF 63 million for the fourth quarter of 2004, up 110% versus the prior quarter and up 142% from the fourth quarter of 2003, which included a CHF 270 million charge for the impairment of acquired intangible assets. The segment's improved performance versus both prior periods benefited from increased revenues in the Alternative Capital Division, partially offset by severance costs of CHF 88 million before tax associated with changes in the business structure. Full-year 2004 net income increased to CHF 530 million compared to 2003, primarily reflecting private equity investment-related gains.
Winterthur Business Unit
Life & Pensions posted net income of CHF 522 million in 2004 compared to a net loss of CHF 2,035 million in 2003, which reflected a goodwill impairment and a cumulative effect of a change in accounting for provisions for policyholder guarantees and annuities. The strong 2004 result was due to cost containment, efficiency improvements and stable investment income. Fourth quarter net income was down CHF 12 million from the third quarter, which benefited from an increase in the valuation of deferred tax assets in relation to tax loss carry-forwards created in prior years of CHF 72 million. Year-on-year, the total business volume, which includes deposits from policyholders and gross premiums written, rose 1%. Insurance underwriting and acquisition expenses fell 27% and administration expenses declined by 5%, with the expense ratio improving 1.7 percentage points down to 9.1%. Net investment income rose 5% and the return on investments backing traditional life policies was 4.8%, up from 4.6% in 2003.
Non-Life reported net income of CHF 206 million for 2004 compared to a net loss of CHF 374 million in 2003. This increase was driven by continued cost containment, an improved underwriting result and higher investment income in 2004, partially offset by a charge of CHF 242 million after tax (CHF 310 million before tax) related to the increase in the provision relating to contingencies arising from the sale of Winterthur International in 2001. The segment's fourth quarter 2004 net loss of CHF 177 million reflects the above-mentioned charge and compares to net income of CHF 198 million in the third quarter of 2004, which benefited from an increase in the valuation of deferred tax assets in relation to tax loss carry-forwards created in prior years of CHF 59 million. Year-on-year, net premiums earned rose 3% and the combined ratio improved by 1.7 percentage points down to 99.7%. Compared to the previous year, the claims ratio decreased by 0.3 percentage points and the expense ratio decreased by 1.4 percentage points. Net investment income was CHF 1,093 million in 2004, an increase of CHF 169 million from 2003. The total investment return for 2004 was 4.5%, up from 4.1% in the prior year.
Net New Assets
Private Banking generated net new assets of CHF 26.4 billion for the full year 2004 with continued healthy inflows from all regions, representing an increase of 47.5% versus 2003. Fourth quarter net new assets amounted to CHF 3.9 billion. Wealth & Asset Management reported CHF 2.3 billion of net new assets for the full year 2004, as inflows of CHF 1.6 billion in Private Client Services and CHF 3.3 billion in the Alternative Capital Division were partially offset by CHF 2.6 billion of outflows at Credit Suisse Asset Management. Overall, Credit Suisse Group recorded CHF 32.9 billion of net new assets for 2004. The Group's total assets under management stood at CHF 1,220.7 billion as of December 31, 2004, up 3.4 % from December 31, 2003.
Senior Management
Richard E. Thornburgh, a Member of the Group Executive Board and former CFO of Credit Suisse Group, has agreed to take the role of leading the integration of Credit Suisse Group in addition to his current responsibilities. Michael Philipp, Chairman and Chief Executive Officer of CSFB Europe, Middle East and Africa, has been appointed a Member of the Group Executive Board by the Board of Directors of Credit Suisse Group.
Dividend Proposal and Share Repurchase Program The Board of Directors of Credit Suisse Group has decided to propose a dividend of CHF 1.50 per share for the financial year 2004 to the Annual General Meeting on April 29, 2005. This compares to a par value reduction of CHF 0.50 per share in lieu of a dividend for the financial year 2003. If approved by the shareholders at the Annual General Meeting, the dividend will be paid on May 6, 2005. In addition, the Board of Directors will request shareholder approval for the launch of a two-year share repurchase program for a value of up to CHF 6 billion.
Outlook
In 2004, Credit Suisse Group proved itself capable of delivering improved performance in the face of mixed market trends. This market environment is expected to continue in 2005 and the strategic plan announced in December will enable Credit Suisse Group to remain competitive. Our intention to become a fully integrated bank will allow the Group to continue to compete effectively by seizing growth opportunities and capturing revenue and cost synergies. The first step in the integration is the merger of the two legal bank entities in Switzerland, which is scheduled for the second quarter. Integration will enable us to better serve clients across multiple business lines and will also facilitate the more efficient allocation of the Group's capital.
Enquiries Credit Suisse Group, Media Relations Telephone +41 1 333 88 44 Credit Suisse Group, Investor Relations Telephone +41 1 333 31 69
For additional information on Credit Suisse Group's results for the fourth quarter and full year 2004, please refer to the Group's Quarterly Report Q4 2004, as well as the Group's slide presentation for analysts and the press, posted 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 December 31, 2004, it reported assets under management of CHF 1,220.7 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.
Today's Presentation of the Results
Analysts' Presentation, Zurich (English) * February 17, 2005, 9.30 a.m. CET / 8.30 a.m. GMT / 3.30 a.m. EST Credit Suisse Forum St. Peter, Zurich
* Internet:
- Live broadcast at www.credit-suisse.com/results - Video playback available approximately 3 hours after the event
* Telephone:
- Live audio dial-in on +41 91 610 5600 (Europe), +44 207 107 0611 (UK), or +1 866 291 4166 (USA), ask for "Credit Suisse Group quarterly results"; please dial in 10 minutes before the start of the presentation - Telephone replay available approximately 1 hour after the event on +41 91 612 4330 (Europe), +44 207 108 6233 (UK) or +1 412 317 0088 (USA), conference ID 408#
Speakers
* Oswald J. Grubel, Chief Executive Officer of Credit Suisse Group * Renato Fassbind, Chief Financial Officer of Credit Suisse Group
Media Conference, Zurich (English/German) * February 17, 2005, 11.30 a.m. CET / 10.30 a.m. GMT / 5.30 a.m. EST Credit Suisse Forum St. Peter, Zurich
* Simultaneous interpreting: German - English, English - German
* Internet:
- Live broadcast at www.credit-suisse.com/results - Video playback available approximately 3 hours after the event
* Telephone:
- Live audio dial-in on +41 91 610 5600 (Europe), +44 207 107 0611 (UK), or +1 866 291 4166 (USA), ask for "Credit Suisse Group quarterly results"; please dial in 10 minutes before the start of the presentation - Telephone replay available approximately 1 hour after the event on +41 91 612 4330 (Europe), +44 207 108 6233 (UK) or +1 412 317 0088 (USA), conference ID 513# (English) or 475# (German)
Speakers
* Oswald J. Grubel, Chief Executive Officer of Credit Suisse Group * Renato Fassbind, Chief Financial Officer of Credit Suisse Group
The full press release including tables can be downloaded from the following link: http://hugin.info/100174/R/981161/145580.pdf