Warburg helps SBC profits rise 84%

SBC Warburg, the London-based investment banking arm of Switzerland's third-largest bank, helped power its parent, SBC, to an 84 per cent increase in profits for the first half of 1997. The booming investment banking arm became the biggest profit earner of SBC's four main businesses, with profits up 60 per cent to SFr691m (pounds 288m).

SBC made SFr1.326bn in the first half and said it expected full-year profits to comfortably exceed SFr1.7bn, though it saw earnings growth slowing in the second half. While the Basel-based bank is the smallest of the Swiss big three, it is now seen by many analysts as the best.

"This is an excellent result and compares well with the other Swiss banks," said Carlo Capaul, a fund manager at Van Vemde Portfolio Management. "If the financial markets rise further, companies like SBC will continue to profit."

The results were interpreted yesterday as good news for London as a global financial centre, as well as confirmation that SBC did a good deal when it bought the ailing SG Warburg two years ago for pounds 890m.

At that time a comment by Warburg's chairman, Sir David Scholey, that the two companies fitted "like the clunk of a Rolls-Royce door" drew widespread scepticism.

Following a failed merger attempt with Morgan Stanley, the UK's largest investment bank was in crisis. Now Warburg's powerful securities side has benefited hugely from the huge new distribution channels it has access to via SBC's global banking operations.

"SBC Warburg keeps growing, enabling Swiss Bank to fulfil its ambition to be a global investment bank," said James Alexander, an analyst at Dresdner Kleinwort Benson.

Sceptics pointed yesterday to soaring financial markets around the world this year, and questioned whether SBC Warburg's growth was sustainable. The Swiss Market Index rose 46 per cent this year, with indexes in Germany up 48 per cent and the UK up 22 per cent. The Dow Jones Industrial Average is up 23.4 per cent.

Commission income for SBC Warburg's securities operations surged with these rising markets and was the main reason for the first-half profit gain.

This year SBC Warburg bought American investment bank Dillon Read for $600m. Last month it announced a joint venture with Brunswick Investment, one of Russia's largest securities firms, and another joint venture with Long-Term Credit Bank of Japan.

Last week, SBC Warburg was named the most successful mergers adviser on cross-border transactions in Europe for the first half of the year by Acquisitions Monthly magazine, beating American rivals such as Morgan Stanley Dean Witter Discovery and Goldman Sachs.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence