Credit Suisse bank has plunged to its first quarterly loss in five years, figures released Thursday showed, as the bank reported heavy extra writedowns linked to the US subprime home-loan crisis. But the Credit Suisse chief executive insisted that the situation had "stabilised" in April and that the group was well-positioned to navigate in difficult market conditions.
The bank reported a net loss of 2.148 billion Swiss francs (1.330 billion euros, 2.11 billion dollars) for the first three months of the year. Writedowns for the quarter totalled 5.847 billion Swiss francs, of which 5.281 billion came from the investment bank unit's leveraged finance and structured products and the remainder from its asset management unit's holdings.
The bank, Switzerland's second biggest, had already written down 4.12 billion Swiss francs, including 3.2 billion from the investment bank unit, in 2007. With total writedowns reaching 9.967 billion Swiss francs so far, it has still fared better than fellow Swiss banking giant UBS.
It managed to make profits for 2007 of 7.76 billion Swiss francs, as opposed to UBS, the country's largest bank, which swung to a full year loss last year. In addition, UBS's writedowns so far exceed 37 billion dollars, making it the world's worst victim from the financial turmoil.
Most of the Credit Suisse writedowns were not incurred directly from subprime home loans, but other structured vehicles, underlining how far the fallout has reached. Some writedowns announced previously also arose in part to what the company said were mispricing of certain asset-backed positions due to "intentional misconduct" by some traders.
A writedown is a reduction of the previously estimated value of an asset because prospects for its performance are acknowledged to have been seriously reduced for the foreseeable future. Credit Suisse said there had been a "continued significant reduction" in its risk exposure.
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