The private banking segment, which comprises the wealth management and corporate & retail banking businesses, reported income from continuing operations before taxes of CHF1.1 billion in the second quarter of 2006, an increase of 21% compared to the second quarter of 2005. Net revenues grew by 15% to CHF2.9 billion in the second quarter of 2006, primarily reflecting higher commission and fee income.
The private bank reported a pre-tax income margin of 38.6% for the second quarter of 2006, an improvement of 1.8 percentage points from the same period of 2005.
The wealth management business reported income from continuing operations before taxes of CHF779 million in the second quarter of 2006, an increase of 31% compared to the second quarter of 2005. The pre-tax income margin was 38.3% for the second quarter of 2006, an improvement of 3.1 percentage points compared to the same period of 2005, Credit Suisse said. Net new assets amounted to CHF16.5 billion, representing an annualized growth rate of 9.0%.
In asset management meanwhile, the bank posted income from continuing operations before taxes of CHF27 million in the second quarter of 2006, down 92% compared to the second quarter of 2005. This decrease primarily reflected costs of CHF152 million associated with the realignment of the asset management business, particularly in the US.
Credit Suisse has conducted a global strategic review of Asset Management and identified a number of measures to secure the future growth of the business. One important measure is the realignment of the asset management operation in the US to create a solid and sustainable platform for expansion in this market by changing its investment approach in a number of its traditional asset management strategies.
We achieved a strong result in a market that experienced higher volatility and increasing investor caution. This shows that our efforts to build a powerful integrated organization are gaining momentum, while our business has proved its resilience in the face of a demanding environment, said Oswald Gruebel, CEO at the Swiss bank.
