Apres le deluge

25 February 2003

Although war clouds the outlook, Credit Suisse reckons it has turned the corner at last. However, the group s troubles are now hurting its private bank. Fund inflows there have slumped.

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Credit Suisse said it would cut another 1,250 jobs and slice back its dividend after reporting the biggest loss for a European bank in 2002.

Switzerland's second biggest bank said the market downturn combined with a bevy of oneoff charges that totaled SFr1.3bn caused a SFr950m net loss in the fourth quarter, for a full year loss of SFr3.3bn. In January, the bank said it would lose around SFr3.4bn.

The bank said that it expected to return to profitability this year, although war and uncertain markets clouded the outlook. As a sign of its troubles, CS said net inflows to its private bank fell to SFr0.5bn from SFr3.4bn in the third quarter. This was due mainly to the impact of increased attention surrounding Credit Suisse Group's financial performance in the course of 2002, the bank said.

CS said its Tier 1 ratio rose to 9.7% at the end of the quarter, versus 9.0% the quarter before. To further preserve capital, CS said it would cut its dividend by 95%.

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