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21 January 2003

A SFr3.4bn annual loss is nothing to be proud of, but it is partly due to what looks like kitchen sink provisioning. More importantly, the group is signalling that the underlying business may finally have stabilized.

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Credit Suisse said it would take an additional charge of SFr700m to cover litigation involving its investment banking subsidiary. It had already set aside $234m to cover its share of the settlement with US regulators concerning analyst independence and IPO allocations.

When added to other charges and oneoff losses, this means the banking group expects to lose Sfr1bn after tax in the fourth quarter and SFr3.4bn for the whole of 2002. The group will announce full year results on 25 February.

The comments came in a preclose announcement. Credit Suisse made some positive comments on trading. It said it expected Winterthur's life and nonlife businesses to return to profit in the fourth quarter, and that profits would improve in the private banking business compared to the third quarter. Credit Suisse also said that bad debt provisions at its investment banking subsidiary declined in the fourth quarter compared with the third quarter.

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