Credit Suisse Group Has First Profit in a Year

Credit Suisse Group, the second-largest Swiss bank and parent of brokerage Credit Suisse First Boston, on Tuesday reported its first quarterly profit in a year as savings from job cuts and gains in its bond business made up for a 16% decline in revenue.

Net income in the first quarter rose to $485 million, up 77% from a year ago, the bank said.

Credit Suisse First Boston, the bank’s securities arm, had a profit of $161 million, after a loss in the final three months of 2002.

As with Wall Street rivals such as J.P. Morgan Chase & Co. and Merrill Lynch & Co., CSFB’s strong business in bonds in the first quarter more than offset a weak stock market.

CSFB, along with nine other major brokerages, last week agreed with federal and state regulators to settle broad allegations of securities abuses during the late-1990s bull market. CSFB will pay a total of $200 million in penalties and disgorgement of profit.

John Mack and Oswald Gruebel, co-chief executives of Credit Suisse, are trying to turn around the company after it spent heavily on investment banking and insurance takeovers during the stock market’s heyday.

Credit Suisse has announced plans to eliminate 9,350 jobs since the middle of 2001, including about 7,000 at CSFB. The bank’s operating expenses dropped 23% in the first quarter from a year earlier as staff levels declined.

From Bloomberg News