Credit Suisse reports $6.3 bn profit in 2009

By DPA, IANS
Thursday, February 11, 2010

GENEVA - Switzerland’s banking giant Credit Suisse reported Thursday 2009 net profits at 6.7 billion francs ($6.3 billion), but also unveiled lower-than-expected fourth quarter results.

Profit for the final quarter of last year stood at 793 million francs.

The private banking division reported net new assets of 6.4 billion francs in the fourth quarter and 41.6 billion over the year as a whole, about a quarter of which was generated from the home market in Switzerland.

“We are confident about our prospects for 2010,” said Brady Dougan, the chief executive officer, in a statement.

He said the bank had gained market share over 2009 and was off to a “strong start” to the first quarter of this year.

At a press conference in Zurich, Dougan said that the industry was to face “inevitable changes in the regulatory environment” but that Credit Suisse was in a “good position” to handle the evolving rules.

The CEO also continued to push the Credit Suisse model of integrating its investment and private banking businesses with asset management, saying it was leading to positive results.

The bank was moving toward compliance on international frameworks on issues like bonuses, cross-border issues and capital requirements, Dougan said.

However, like other Swiss banks, Credit Suisse was hit by an Italian tax amnesty and saw clients withdraw a related 5.6 billion francs as a result.

Dougan said the bank would, however, meet targets on net new money and that it managed to keep about two-thirds of Italian assets, most of which were now in on-shore accounts.

The investment bank division reported pre-tax income of 6.8 billion last year and Credit Suisse said it exited most proprietary trading businesses.

The fourth quarter though saw lower revenues and profits at the division than the previous three months.

Analysts at Vontobel bank in Zurich said in a note that the lower profits at the division were a major reason for the lower-than-expected quarterly results, as the “trading business was weak” with smaller quarter-on-quarter revenue growth than its peers.

The tier 1 capital ratio, a sign of regulatory health, was 16.3 percent, down slightly off the previous quarter.

Credit Suisse said it also paid a 500 million franc settlement with the US government for violating economic sanctions.

Regarding bonuses, the bank said it rewarded 21 percent less compensation than in 2007, and 40 percent of what was given was in the form of deferred payments.

Filed under: Economy

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