Dec. 7 (Bloomberg) -- Credit Suisse Group, Switzerland's second-biggest bank, said plans to merge its First Boston securities unit with the rest of the banking business will add 1 billion Swiss francs ($760 million) to annual earnings.

Revenue gains from improved cooperation among the company's three main divisions and savings from cutting costs in areas such as computer networks, purchasing and real estate will boost profit in 2008, the Zurich-based bank said in a statement today.

Chief Executive Officer Oswald Gruebel in June announced plans to drop the 73-year-old First Boston name as the company aligns the securities unit more closely with the private banking business, which accounts for more than a third of earnings. Credit Suisse's shares have trailed competitors in the past five years and the bank's profitability still lags behind Wall Street rivals.

The timeframe for Credit Suisse's target ``is still relatively distant and the revenue gains will depend on markets,'' said Christoph Ritschard, a fund manager at Zuercher Kantonalbank, which oversees about $99 billion, including Credit Suisse shares.

Credit Suisse said it expects total pretax savings of 600 million francs in 2008 and sees ``gross revenue synergies'' of 1.2 billion francs, depending on market conditions. The gains will be offset by costs of 520 million francs, resulting in additional pretax earnings of about 1.3 billion francs or 1 billion francs after tax. Pretax savings in 2007 will be about 250 million francs.

Shares of Credit Suisse fell 50 centimes, or 0.7 percent, to 68 francs at 10:32 a.m. in Zurich. The shares are up 42 percent this year and increased 7 percent in the past four trading days.

The focus on private banking, asset management and investment banking will enable Credit Suisse to ``foster cooperation among businesses to capture both revenue growth and cost savings synergies,'' the bank said in the statement, published before Gruebel, 62, updates investors on the plan today in London.

Gruebel a year ago said he aimed to boost profit by almost half to 8 billion francs in 2007, with the biggest increase coming from Credit Suisse First Boston. Brady Dougan, who replaced John Mack as head of the unit last year, is focusing the business on profitable areas such as commodities and proprietary trading.

Credit Suisse's return on equity, a measure of profitability, increased to 20.1 percent in the third quarter from 15.3 percent a year ago. The return still trails that of UBS, Citigroup Inc., Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc.

Earnings from investment banking should increase by 63 percent to 3 billion francs in 2007, while the company expects private banking profit to rise 19 percent to 4 billion francs. Credit Suisse will stop using the First Boston brand on Jan. 16.

UBS analysts raised their rating on Credit Suisse shares to ``Buy 2'' from ``Neutral 2'' on Dec. 5 on optimism the private banking and asset management businesses will benefit from rising stock markets. The analysts said CSFB is unlikely to reach a target for a 20 percent pretax margin in 2007.

As part of the plan to focus on its banking business, Credit Suisse is preparing its Winterthur insurance unit for a stock market listing. The business yesterday won a dispute with XL Capital Ltd. over reserves involving a unit it sold to the Bermuda- based insurer in 2001, clearing the way for the sale.

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