Credit Suisse warns expects no Q1 profit
Credit Suisse said it was unlikely to post a profit in Q1 of 2008 due to big debt write-downs and difficult markets, but the shock write-downs it revealed in February were not as bad as first thought.
“In light of the difficult market conditions in March, at this time, Credit Suisse believes it is unlikely to be profitable in the first quarter,” the bank said in a statement.
The bank reduced its previously announced estimate for write-downs related to asset-backed securities by 200 million Swiss francs to 2.86 billion francs.
In February, the bank shocked markets by writing down $2.85 billion in asset-backed investments and suspending some traders after finding pricing errors on its books.
The bank had previously said it expected to post a profit for the first quarter and estimated that the write-downs would wipe $1 billion off its net earnings, after taking into account tax credits and cancelling some staff bonuses.
Credit Suisse said it would post a write-down of 1.18 billion francs against its 2007 accounts - which translated into a hit of 789 million francs net of tax - and of 1.68 billion francs against its first quarter 2008 accounts as a result of the new valuations.
The write-downs are the latest in a string of shocks from global banks, including huge new subprime-related exposures at rival UBS and the emergency takeover of US investment bank Bear Stearns by rival J.P. Morgan.
Credit Suisse had previously reported subprime-linked write-downs of 2 billion Swiss francs in 2007. (Reuters)
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