Credit Suisse Group reports $5.2 billion loss

Bloomberg

The bank reported a net loss of 6.02 billion francs ($5.2 billion), wider than the 4.2 billion-franc estimate of analysts surveyed by Bloomberg. For 2008, the deficit totaled 8.2 billion francs.

Credit Suisse, which sidestepped the worst of the U.S. subprime crisis, suffered trading losses after the September collapse of Lehman Brothers Holdings roiled financial markets. Chief Executive Officer Brady Dougan said in December the bank would cut 5,300 jobs and exit some proprietary activities to weather "challenging" markets. The pace of new investment by wealthy clients also slowed in the fourth quarter.

"Net new money is slightly below what we expected, but comes in a difficult environment," said Teresa Nielsen, an analyst at Bank Vontobel in Zurich who rates the bank "hold."

Credit Suisse shares fell 49 percent over the past 12 months. That compares with a 61 percent drop at Zurich-based UBS and a 64 percent slump in the Bloomberg Europe Banks and Financial Services Index in the same period.

"We ... were profitable across all divisions year to date," Dougan said in a statement. "We have positioned our businesses to be less susceptible to negative market trends if they persist in the coming months."

The investment bank had a pretax loss of 7.78 billion francs in the quarter after 3.19 billion francs of writedowns on leveraged loans and structured products and as trading hedges failed. It also had about 600 million francs in costs related to cutting jobs. Unlike UBS, the biggest Swiss bank, Credit Suisse declined government aid to split off toxic assets.

Profit at the private banking unit fell 36 percent to 876 million francs, hurt by a 407 million-franc provision for auction-rate securities. The asset management division had a loss of 670 million francs after the value of private equity and other investments had to be marked down by 599 million francs.

Credit Suisse plans a cash dividend of 10 centimes a share for 2008, compared with 2.5 francs for the previous year.

Credit Suisse attracted 2 billion francs of net new money from wealthy clients in the fourth quarter, down from 11.3 billion francs in the third.