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Securities Drag Credit Suisse 2007
Thursday March 20, 6:57 am ET
Credit Suisse Slashes 2007 Figures, Cuts Forecast After Internal Probe Into Securities
ZURICH, Switzerland (AP) -- Credit Suisse Group on Thursday slashed previously released 2007 profit figures because of an internal investigation into securities valuations and said it doesn't expect to post a profit for the first quarter.
Credit Suisse said it has determined that the pricing errors "were, in part, the result of intentional misconduct by a small number of traders.
The bank, Switzerland's second largest, said it revised its fourth-quarter net profit downward to 540 million Swiss francs ($541 million) from the previously stated 1.33 billion francs.
The full-year net profit figure now forecast is 7.76 billion francs ($7.8 billion), down from the previously stated 8.5 billion francs.
"With regard to 2008, including these valuation reductions, Credit Suisse was profitable through the end of February," a company statement said. "However, in light of the difficult market conditions in March, at this time, Credit Suisse believes it is unlikely to be profitable in the first quarter."
The bank, which has been profitable despite the subprime crisis, said it has put into place controls to prevent future problems.
"These employees have been terminated or have been suspended and are in the process of being disciplined under local employment law. The review also found that the controls put in place to prevent or detect this activity were not effective."
Chief Executive Brady Dougan called the incident "unacceptable" and said the bank's overall controls remain sound.
"Credit Suisse continues to be well positioned through the challenging and volatile markets that have existed since the middle of 2007," Dougan said. "We are one of the world's best capitalized banks, and our funding is conservative."
Credit Suisse shares fell 8.8 percent to 47.20 francs ($47.3) in Zurich. |
