Credit Suisse posts €500m loss for fourth quarter as €850m costs bite
Published 10/02/2012 | 05:00
SWISS banking giant Credit Suisse posted a surprise fourth-quarter net loss after taking almost CHF1bn (€850m) of charges to speed cost-cutting and offload risky assets to meet stiffer capital rules. "Our performance for the fourth quarter 2011 was disappointing," said chief executive Brady Dougan.
"It reflects both the adverse market conditions during the period and the impact of the measures we have taken to swiftly adapt our business to the evolving market and regulatory requirements."
Credit Suisse shares dropped over 3pc in trading. Mr Dougan said the charge of CHF981m was due to the accelerated implementation of a risk reduction plan, steps to exit unprofitable businesses and expenses due to the rapid execution of cost-cutting programmes.
"We were keen to get this done and clear the decks in terms of the trading for 2012," Credit Suisse financial chief David Mathers said.
Credit Suisse said it had got off to a good start to the year, with encouraging signs of more client activity and the bank's underlying return on equity around its 15pc target, when including the effect of cost and risk cut programmes.
The charge pushed Credit Suisse into a quarterly net loss of CHF637m, compared to analyst expectations for CHF430m profit. The bank is making shareholders share the pain, proposing to nearly halve its dividend to CHF0.75 per share, from CHF1.30 in 2010. Cross-town rival UBS also posted disappointing results earlier this week, mirroring a weak quarter seen at Goldman Sachs, JPMorgan and Deutsche Bank. (Reuters)