Swiss banking giant Credit Suisse took another hit to earnings yesterday from its exposure to the US subprime loan crisis and warned there could be no profit in this year's first quarter.
Credit Suisse, revising figures released last month, reduced its net profit for last year to 7.76 billion Swiss francs (US$7.76 billion) due to the subprime loan collapse.
That showed a 6 percent fall, as opposed to the 3 percent increase when it posted a net profit for last year of SF8.55 billion last month.
At that time, the bank had sought to reassure investors it had largely weathered the collapse in the US property market after making huge write-downs on its exposure to the subprime or higher risk mortgage sector.
Credit Suisse said yesterday that "because of difficult market conditions in March ... it is unlikely that the company will be profitable in the first quarter."
The announcement added to concerns about the health of the banking sector as a whole and hit the stock price, dealers said.
In early Zurich trade, Credit Suisse shares were down 8.9 percent at SF47.2 while the market overall lost 1 percent.
"I don't think that many people expected Credit Suisse to publish a profit for the first quarter," said Dirk Becker, a Landsbanki Kepler analyst.
"It is to be expected that the banking sector as a whole will publish further bad news," the Zuercher Kantonalbank said in a note.
Although the group had said last month that it expected to be profitable in the first quarter, it now expects to swing to a loss, marking the first time in four years when the group will post a quarterly loss.
"That is a situation that we cannot tolerate," chief executive Brady Dougan said in a press conference by telephone.
Credit Suisse also confirmed that price fixing errors discovered in its structured credit business were in part due to "intentional misconduct by a small number of traders" who it said had since been suspended or dismissed.
"Certain individuals did not follow procedures," Dougan said.
Controls put in place to prevent or detect this activity had proved ineffective, the bank said.
A source said this should not be seen as in anyway similar to the massive rogue trading scandal at French bank Societe Generale which in January had to take a hit of 4.9 billion euros as a result.
The source added that there were no indications of intentions by the individuals to cheat the bank or to profit from the action.
Dougan also said the incident was "unacceptable and does not meet the standards" required by the bank.
"Credit Suisse continues to be well positioned through the challenging and volatile markets that have existed since the middle of 2007 ... Our private banking business continues to perform well," Dougan said.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat