In the first quarter of 2004, we started to reap the benefits of our transformation agenda over the last two years. Net income of € 941 million (1Q03: net loss of € 219 million) reflected the significantly improved profitability of our leaner business platform, and also our reduced exposure to charges or write-downs on alternative investments . Adjusted return on average active equity (post-tax) was 15% in the current quarter and basic earnings per share increased to € 1.81 (with diluted earnings per share of € 1.67).
Income tax expense of € 597 million increased by € 174 million due to significantly higher taxable pre-tax income. Current quarter sales of equity securities resulted in a € 23 million reversal of 1999/2000 credits for tax rate changes (1Q 2003: € 30 million). Excluding the reversal-effect our effective tax rate was 38% in the first quarter of 2004 (including the reversal-effect our effective tax rate was 40%).