Credit Suisse 3Q profit drops 31 %

[tribaljunkee]

Credit Suisse 3Q Profit Drops 31 Percent
Credit Suisse Says 3Q Profit Slides 31 Pct, Hurt by Writedowns, Lower Demand for Buyout Loans
November 01, 2007: 07:40 AM EST

NEW YORK (Associated Press) - Credit Suisse Group's third-quarter profit dropped 31 percent, hurt by writedowns caused by the U.S. housing market slowdown and lower demand for buyout loans, the company said Thursday.

Switzerland's second largest bank said net profits for the July-September period dropped to 1.3 billion francs ($1.12 billion) from 1.89 billion francs a year ago.

The housing slowdown in the U.S. contributed to Credit Suisse having to reduce the value of its investments in mortgages and related loans by 1.1 billion francs ($948 million) during the quarter.

The impact of the subprime crisis was lower than for its cross-town rival UBS, however, which posted a third-quarter loss of 830 million Swiss francs ($712.9 million) on Tuesday after writing down 4.2 billion francs ($3.6 billion) in bad investments.

Credit Suisse recorded a further drop of 1.1 billion francs ($949 million) in the value of its buyout loans _ secured on companies' assets _ which it was unable to sell on to other institutions. The bank said it held 60 billion francs ($51.62 billion) worth of buyout _ or leverage _ loans in the third quarter, up from 48 billion francs in the previous quarter.

Shares in Credit Suisse fell 2.9 percent to 75.65 francs ($65.07) in Zurich as analysts expressed mild disappointment at the results, with some noting that a 315 million franc ($271 million) share of third-quarter profits came from deferred tax gains.

"The extreme market conditions that characterized the third quarter affected many of our businesses," Credit Suisse Chief Executive Brady Dougan said.

"However, our global diversification and balanced business mix helped us mitigate the impact on our overall performance, maintain solid profitability and deliver a record result for the first nine months of the year," he said.

Net income for the first nine months of 2007 totaled 7.22 billion francs ($6.22 billion), up 9 percent from the same period in 2006.

Credit Suisse gave a guardedly optimistic outlook, saying there were "encouraging signs that activity in the credit markets is increasing" but cautioned that "it is too early to predict when all of the affected markets will return to more normal levels."

Pretax profits from its private banking business rose 26 percent to 1.29 billion francs ($1.11 billion) during the third quarter.

The total amount of assets managed by Credit Suisse increased by 130 billion francs ($112 billion) to 1.57 trillion francs ($1.35 trillion) during the period. Top of page

[TheHipHopBillGates]

This mostly had to do with their decision to shutdown Decision 1(thier mortgage wing) and lay off 1500 people, this is really no suprise.

[woo]

This mostly had to do with their decision to shutdown Decision 1(thier mortgage wing) and lay off 1500 people, this is really no suprise.

that's so obvious tho

[RICKY]

I never used either or, but I didntt think their programs were too excessive. Well compared to other places out there.