Credit Suisse plunges into loss on further heavy write downs

Thursday, April 24, 2008

ZURICH (AFP) - Credit Suisse bank has plunged to its first quarterly loss in five years, figures released Thursday showed, as the bank reported heavy extra write downs linked to the US sub prime home-loan crisis.

But the Credit Suisse chief executive insisted that the situation had "stabilized" in April and that the group was well-positioned to navigate in difficult market conditions.

The bank reported a net loss of 2.148 billion Swiss francs (1.330 billion euros, 2.11 billion dollars) for the first three months of the year.

Write downs for the quarter totaled 5.847 billion Swiss francs, of which 5.281 billion came from the investment bank unit's leveraged finance and structured products and the remainder from its asset management unit's holdings.

The bank, Switzerland's second biggest, had already written down 4.12 billion Swiss francs, including 3.2 billion from the investment bank unit, in 2007.

With total write downs reaching 9.967 billion Swiss francs so far, it has still fared better than fellow Swiss banking giant UBS.

It managed to make profits for 2007 of 7.76 billion Swiss francs, as opposed to UBS, the country's largest bank, which swung to a full year loss last year.

In addition, UBS's write downs so far exceed 37 billion dollars, making it the world's worst victim from the financial turmoil.

Most of the Credit Suisse write downs were not incurred directly from sub prime home loans, but other structured vehicles, underlining how far the fallout has reached.

Some write downs announced previously also arose in part to what the company said were missing pricing of certain asset-backed positions due to "intentional misconduct" by some traders.

Source

http://uk.news.yahoo.com/afp/20080424/tts-switzerland
-banking-company-earnings-5ee5e64.html