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Profits dive 49% at Credit Suisse
Hugo Duncan, Evening Standard12.02.08
Credit Suisse today reported a 49% dive in profits but trimmed losses from the subprime mortgage crisis to Swf2 billion.
Switzerland's second-largest bank, which has 6000 staff at Canary Wharf, said fourth-quarter income almost halved to Swf1.33 billion last year.
However, profits for the whole of 2007 edged 3% higher to Swf8.55 billion as the bank, under the leadership of Brady Dougan, weathered the market turmoil better than many of its rivals in Europe and the United States.
It said total writedowns from the credit crunch came in at Swf2 billion in 2007 - down from the Swf2.2 billion it flagged earlier in the year.
It included a hit of Swf£1.3 billion in the fourth quarter as the bank escaped relatively unscathed from the collapse of the subprime mortgage market in America.
Losses at Swiss rival UBS have spiralled to $18.4 billion (£9.4 billion) while Wall Street giants Merrill Lynch and Citigroup have written-off more than $20 billion each.
Dougan, who became Credit Suisse's chief executive in May, having been head of the investment banking unit, scaled down subprime-related holdings before the crisis took hold. It has cost banks around the world $145 billion and counting.
Bear Stearns analyst Christopher Wheeler said: “Credit Suisse have dodged the worst of the bullets in terms of writedowns, certainly in 2007.”
Dougan said the firm dealt well with “an extremely challenging environment” but warned of “continuing turmoil in the credit markets” in the near term.
“We contained the impact of the credit market dislocation in investment banking and increased revenues from the previous quarter,” he added.
“We are well-capitalised and conservatively funded.”
The bank is axeing about 500 jobs at its investment banking division worldwide, with many of the cuts coming in London.
