Net Revenues Dip Slightly At Private Banking, Wealth Arm Of Credit Suisse In Q1

Tom Burroughes

24 April 2013

Credit Suisse said today that its private banking and wealth management arm logged net revenues of SFr3.303 billion ($3.49 billion) in the first quarter of 2013, a 5 per cent year-on-year fall, while pre-tax income stood at SFr881 million.

The drop in net revenues was primarily driven by the partial sale of an investment in Aberdeen Asset Management last year, and lower net interest income, partially offset by slightly higher recurring commissions and fees. Transaction- and performance-based revenues were stable compared to a year ago, the Zurich-listed bank said.

Among the Wealth Management Clients unit, there was a pre-tax income of SFr511 million, with stable net revenues of SFr2.250 billion compared to the same quarter a year ago, reflecting higher recurring commissions and fees and other revenues, which offset the adverse impact of the ongoing low interest rate environment.

"Each of the division’s three businesses contributed to our strong net new assets of SFr12.0 billion in the quarter, reflecting strong growth in Switzerland, Asia Pacific and the Americas, partially offset by continued outflows in Western Europe. The organizational realignment of our integrated Private Banking & Wealth Management division is well on track and we are confident that these efforts will allow us to serve our clients better and more effectively and to further increase our productivity, efficiency and returns in the coming quarters," Brady Dougan, chief executive, said in today's statement.

Other details

Within asset management, pre-tax income was SFr120 million and net revenues were SFr533 million, “down significantly” from a year before, it said, reflecting gains last year from the partial sale of an investment in Aberdeen.

There were net new assets across the group of SFr12.0 billion.

“Wealth Management Clients contributed solid net new assets of SFr5.5 billion, with continued inflows from emerging markets and from the ultra-high-net-worth individual (UHNWI) client segment, partially offset by continued outflows in Western Europe,” the bank said.

Over Credit Suisse as a whole, on an underlying basis, there was a core pre-tax income of SFr2.032 billion, net income attributable to shareholders of SFr1.462 million and return on equity of 16 per cent, it said. On a reported basis, core pre-tax income was SFr1.822 billion, net income attributable to shareholders was SFr1.303 billion and return on equity was 14 per cent.

At the end of the first quarter, Credit Suisse delivered cost savings of SFr2.5 billion, excluding certain significant items.

The bank said it “remains on track to reach its total run-rate reduction target of SFr4.4 billion by end-2015”.