CSFB suffers in second quarter

TOP CITY house Credit Suisse First Boston saw a collapse in investment banking profits in the second quarter of the year with a dive in equity trading revenues reflecting the lower liquidity and reduced volumes in world stock markets.

However, a strong performance from CSFB's asset management arm and its wealth management business plus good returns from the parent group's retail and corporate banking and insurance arms helped Credit Suisse Group come in with better than expected SwFr1.45bn (£620m) for the three months to the end of June.

CSFB, which has been in turmoil this summer since the unexpected departure of high-profile boss John Mack, reported net income in the quarter of SwFr430m, down 43% on what it made in the first quarter, though double the profits made in the second quarter of 2003.

Credit Suisse chief executive Oswald Grubel said CSFB's performance was 'satisfactory given the challenging environment'.

The investment banking and share and bond trading division saw profits dive 79% quarter-on-quarter and 17% year-on-year. Its bonus-based remuneration bill fell by 18% on the lower revenues generated, it said. CSFB's asset management arm, however, doubled its profits from the first quarter.

German investment bank Commerzbank, reported second-quarter profits of e248m (£164m), down 2% on the first quarter but 40% better than a year ago.