Credit Suisse Back in Black

Credit Suisse(CS Quote) shares rose as much as 6% Thursday, after the Swiss bank reported profits slipped 62% from a year ago in the second-quarter, but returned to profitability after a big loss in the prior period.

The Zurich-based bank reported net income of 1,215 million Swiss francs, a big drop from last year's 3,189 Swiss francs, but a nice gain over the first quarter's loss of 2,148 Swiss francs. Diluted earnings per share came in at 1.12 versus 2.82 for the previous year, but again recovering from the first quarter loss of 2.10.

Credit Suisse has managed to survive the current financial market crisis much better than fellow Swiss bank UBS(UBS Quote). It had less exposure to risky financial instruments and quickly reduced its portfolio of such instruments.

"We continued to reduce our risk positions, as we have done since the early stages of the credit crisis," CEO Brady Dougan said in a company statement. "Our conservative funding structure and our position as one of the world's best capitalized banks remain competitive advantages.

Shares recently were rising 3.9% to $49.83.

The bank's capital ratio of 10.2% is better than some of its peers, as it has not resorted to a dilutive capital raise and has built a strong dividend. While better than the first quarter of 2008, the capital ratio is below the13% reported in the second quarter last year.

Switzerland's second-largest bank continued to reduce exposure to toxic instruments as it trimmed its commercial mortgage exposure by 22% and cut its leveraged finance holdings by 31% during the second quarter.