Credit Suisse contains credit crisis impact

Zurich-based Credit Suisse has unveiled a lower than expected Sfr1.3 billion writedown on leveraged finance, and structured debt and mortgage investments in the fourth quarter of 2007.

The bank's loss, which includes $434 million in residential mortgage-backed securities (RMBS) and $384 million in commercial mortgage-backed securities, is considerably lower than that of some of its rivals, who have written down up to seven times this in the same quarter. Credit Suisse attributes its performance to its “strong risk management capabilities".

Brady Dougan, Credit Suisse's chief executive, said: “I am pleased to announce record results for 2007, which we achieved in an extremely challenging environment.” The bank’s latest figures, released February 12, also revealed a reduction in its net US subprime exposure, from the $3.5 billion reported in the previous quarter to $1.5 billion.

The bank also announced a $9 billion reduction in its commercial mortgage bond holdings, and a further $15 billion in leveraged loans, in the same period. RMBS exposures stood at $1.5 billion, down from $3.5 billion. The quarter’s net profit fell 72%, to $1.2  billion from $4.3  billion in the final quarter of 2006. Its full-year net income of $7.7 billion was down 25% compared with 2006.

UBS, based in Zürich, has also released its fourth-quarter results, confirming the $13.7 billion loss it forecasted at the end of January. In a report released today, the bank cited 2007 as “one of the most difficult in its history", recording its first annual net loss - $3.9 billion - since its creation. "UBS expects 2008 to be another difficult year," the bank said. 

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