Credit Suisse welcomes Swiss 3.25% decision
SWITZERLAND – Swiss bank Credit Suisse has welcomed the Swiss government’s decision to reduce the guaranteed minimum interest rate to 3.25%.
The government reduced the guaranteed rate of return to 3.25% from four percent from the start of this year. Credit Suisse says the decision “will partially alleviate” the impact of the adverse business environment for group life insurers.
The company said the its employee benefits business is part of Switzerland’s second-pillar retirement system – and that it represents 20.6% of the technical reserves of its Life & Pensions division.
Swiss president Pascal Couchepin recently hinted that there might be a further reduction in the guaranteed minimum interest rate depending on investment returns and economic developments.
The life and pensions arm reported a loss of 1.4 billion Swiss francs (950 million euros) in 2002, Credit Suisse said – reflecting a 3.3 billion franc, or 69.8%, fall in investment income. But the unit posted a 9.2% growth in gross premiums written in the year and returned to profitability in the fourth quarter.
The statement follows the announcement of around 350 jobs at its Winterthur pensions division last month.
The bank added that it sees the main growth markets for the life and pensions business as Germany, Belgium, Italy, Spain and the UK.