Credit Suisse net falls

May 21, 2001
Web posted at: 0638 GMT

LONDON (CNN) -- Credit Suisse, Switzerland's second-largest bank, said profit fell 25 percent as demand for its investment banking services declined.

The Zurich-based bank said on Monday first-quarter net income declined to 1.43 billion Swiss francs ($818 million), or 4.75 francs a share, from 1.92 billion francs, or 7.02 francs, in the year earlier period.

Credits Suisse joins an elite list of banks, such as its larger domestic rival UBS, in reporting sharply lower quarterly earnings as investment banking income crimps profit.

The company warned "the current difficult capital markets environment ... is continuing in the second quarter, affecting both its asset management and investment banking units."

Operating profit at Credit Suisse First Boston, its investment banking unit, fell 15 percent to 659 million francs, including the cost of acquisitions and other factors. Net profit amounted to 396 million francs. The company did not provide a comparable figure.

Credit Suisse said its first-quarter profit included goodwill amortisation – cost of acquisition -- of 298 million francs for the $12.4 billion purchase of U.S. broker Donaldson, Lufkin & Jenrette completed in November.

The group said operating expenses rose 35 percent, mainly due to the DLJ acquisition, but added cost savings from the deal were set to exceed the targeted $1 billion by the end of 2001.

Assets under management rose slightly to 1.366 trillion francs. Credit Suisse, one of the world's largest private wealth management groups, reported strong net inflow of managed assets across all business units totaling roughly 19.9 billion francs.

Private banking contributed 8.4 billion francs to new net money, including 3.7 billion francs gained through the acquisition of British investment management company JO Hambro.

--from staff and wire reports

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Credit Suisse

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