Credit Suisse Swings to Loss on Writedowns

The Swiss bank reported a fourth-quarter loss of 6.02 billion Swiss francs ($5.2 billion) as it recorded large writedowns.
Author:
Publish date:

Updated from 1:50 a.m. EST

Swiss bank

Credit Suisse

(CS) - Get Report

reported a fourth-quarter loss of 6.02 bilion Swiss francs ($5.2 billion) after recording large writedowns for leveraged finance and structured products, compared with year-earlier net income of 540 million Swiss francs.

The results were far worse than the 3.72-billion-franc loss analysts had expected.

Switzerland's second-biggest bank said combined net writedowns in the leveraged finance and structured products businesses in the fourth quarter were 3.2 billion francs. The latest quarter also included a loss from discontinued operations of 538 million francs related to the disposal of part of the company's asset management business.

Credit Suisse said it has reduced its exposure to risky assets by 87% between the end of the third quarter of 2007 and the start of this year.

Credit Suisse said core net revenue was a negative 1.83 billion francs in the quarter, a swing from positive 6.5 billion francs in the prior-year period.

The bank reported a full-year 2008 loss of 8.2 billion francs compared with net income of 7.7 billion francs in 2007.

Credit Suisse said its private banking business recorded strong asset inflows in 2008.

"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," said CEO Brady Dougan.

All divisions began the year profitably, he said.

Rival Swiss bank

UBS

(UBS) - Get Report

on Tuesday reported a fourth-quarter loss of 8.1 billion Swiss francs and a 2008 loss of 19.7 billion Swiss francs primarily because of losses on risk positions in its investment bank.

Unlike the larger bank, however, Credit Suisse has so far not resorted to a bailout offer from the Swiss government.

Copyright 2008 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.