Credit Suisse Q3 Writedowns Hit Investment Bank

Thu Nov 1, 2007 6:01pm EDT
 
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By Andrew Hurst, European Banking Correspondent

ZURICH (Reuters) - Credit Suisse (CSGN.VX: Quote, Profile, Research) said third-quarter profit at its investment bank was all but wiped out by writedowns, leading to a 31 percent fall in group net earnings to 1.3 billion Swiss francs ($1.12 billion).

Investment banking income was hit by writedowns of over 2.2 billion Swiss francs ($1.9 billion) in leveraged loan commitments, residential mortgages and collateralised debt obligations. The division barely broke even.

The results, boosted at group level by a tax credit and revaluations of bond holdings, sent the bank's share price lower.

Credit Suisse's shares were 2.95 percent down at 0940 GMT, when the DJ Stoxx European banking sector index was down 1.59 percent.

Banks worldwide have taken charges totaling more than $20 billion on holdings in mortgage-backed securities which have been hit by rising defaults in U.S. subprime mortgages -- loans extended to borrowers with patchy credit histories.

"The extreme market conditions that characterised the third quarter affected many of our businesses," Chief Executive Brady Dougan said in a statement on Thursday.

"It is too early to predict when all of the affected markets will return to normal levels," he added.

Credit Suisse, which said it had started unwinding its exposure to subprime mortgages late last year, has emerged less damaged by the subprime market meltdown than many of its peers.  Continued...

 

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