Credit Suisse, which heretofore looked somewhat immune to credit market problems, has joined its peers in having a loss-making quarter. A Sf5.3 billion writedown on leveraged loans and mortgage instruments was the proximate cause.
Note the quarterly deficit was more than three times the consensus estimate. The CEO was also loath to declare the debt crisis to be in remission.
Credit Suisse Group, Switzerland’s second-biggest bank, reported a first-quarter loss that exceeded estimates on writedowns linked to deteriorating credit markets.
The net loss, the bank’s first in almost five years, totaled 2.15 billion Swiss francs ($2.1 billion), compared with a 2.73 billion-franc profit a year earlier, Zurich-based Credit Suisse said in a statement today. The median estimate of 14 analysts surveyed by Bloomberg News was for a 594 million-franc loss.
Chief Executive Officer Brady Dougan said the results were “clearly unsatisfactory” after 5.3 billion francs of markdowns on leveraged loans and mortgage-related securities…..
The writedowns at the securities unit included collateralized debt obligations that the bank said last month were intentionally mispriced by a “a small group” of traders. The bank had writedowns of 2.66 billion francs on CDOs, 1.68 billion francs on leveraged finance and 848 million francs on commercial mortgage-backed securities.
Profit at the wealth management unit fell 13 percent to 860 million francs, while earnings rose 3 percent to 464 million francs at the corporate and retail banking division…
On a number of occasions “people had seen the light at the end of the tunnel and it’s been a train coming down the tracks,” Dougan said today. “Things have stabilized a bit in April. While we’re certainly hopeful that things will improve from here, we’re not counting on it.”