Credit Suisse makes bigger than expected loss

Keystone

The Credit Suisse Group has announced a full-year loss of SFr8.2 billion ($7.09 billion) - its worst ever result - with a fourth-quarter net loss of SFr6 billion.

Switzerland’s second-largest bank after UBS blamed the result on a poor trading performance and restructuring charges.

Analysts had been forecasting a full-year net loss of around SFr6 billion and a loss of SFr4 billion for the fourth quarter.

UBS on Tuesday reported a net loss for 2008 of SFr19.7 billion, the worst result in Swiss corporate history.

Credit Suisse announced in December that was cutting 5,300 jobs following a net loss of about SFr3 billion in October and November.

It said on Wednesday it had achieved about 50 per cent of its targeted job cuts to bring staff numbers down to 47,800.

“Strong start”

In a statement on Wednesday, CS said it had made a “strong start” in 2009 and was profitable across all divisions to date.

Private banking remained “solidly profitable” and had recorded net new assets of SFr50.9 billion in 2008.

Credit Suisse suffered less than UBS in its client confidence during the year. Clients withdrew a total of SFr3 billion from CS, while the figure was more than SFr200 billion at UBS.

But its investment banking business was in the red to the tune of SFr14.18 billion before taxes, with more than half the loss (SFr7.78 billion) coming in the fourth quarter.

“While our full-year results are clearly disappointing, we entered 2009 with a very strong capital position, a robust business model, a clear strategy and well-positioned businesses,” commented CEO Brady Dougan.

Business positioned

“We were profitable across all divisions year to date. We have positioned our businesses to be less susceptible to negative market trends if they persist in the coming months and to prosper when markets recover.”

Unlike UBS, Credit Suisse has not asked for government aid to split off toxic assets and has been attracting more money from wealthy customers.

“This will be a better year for Credit Suisse,” commented Ralph Silva, director of research at the TowerGroup.

“They’re going to start taking more of the high-net worth individuals, particularly in the European market.”

CS repeated a target of cutting its investment bank to 17,500 staff by the end of 2009 from 19,700 at the end of 2008.

Credit Suisse also noted that the total for risky assets in investment banking was down to SFr11.6 billion from SFr27 billion at the end of September and SFr99 billion at the start of the credit crisis in September 2007.

swissinfo with agencies

Key facts

Credit Suisse 2008 result

Net interest income: SFr8.409 billion (+1.3%)
Net commission income: SFr14.755 billion (-22.2%)
Net trading income: -SFr9.853 billion
Net loss: -SFr8.218 billion
Proposed dividend: SFr0.10 (SFr2.50 in 2007)

swissinfo.ch