Credit Suisse Hit by Costs

Profits rise 15% but the shares are lower overseas.
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Credit Suisse

(CSR)

said fourth-quarter profit rose 15% vs. the same quarter last year, but higher costs and lower trading revenue disappointed the market.

Fourth-quarter profit rose to 1.1 billion Swiss francs ($838 million) from 959 million francs ($728 million) a year ago. Net revenue rose 10% from a year ago to 14.2 billion francs ($10.86 billion).

But the company reported a share-based compensation charge of 421 million francs ($320 million) in the fourth quarter that cut into profits. Expenses in private client and investment banking divisions, the bank's two largest banking units, also increased during the quarter.

Shares of Credit Suisse in Switzerland were down as much as 6% Wednesday.

Income in the institutional securities division, the part of the bank that includes investment banking and trading, increased 25% to 336 million francs ($255 million) due to a significant rise in investment banking revenue worldwide. But large loses in trading revenue, which dropped 45% compared to the third quarter, offset some of the gains.

"2005 was a decisive year for Credit Suisse Group, as we merged our banking entities while simultaneously growing our business and delivering improved profitability. In particular, our businesses capitalized on increased client activity to produce stronger revenues." CEO Oswald J. Grubel said in the release.

The company proposed paying a dividend of 2.00 francs ($1.52) for the year, compared with 1.50 francs ($1.14) paid last year. The proposed dividend would be paid on May 4.

For the full year, Credit Suisse said net income was up 4% to 5.85 billion francs ($4.45 billion).