Credit Suisse posts $876 million 4Q net profit

[February 10, 2011]  GENEVA (AP) -- Credit Suisse Group reported fourth-quarter earnings Thursday of 841 million Swiss francs ($876 million), an improvement on the same period a year ago but still missing analysts' expectations for 2010.

The results Thursday exceeded those from the same period the previous year, when the second-largest Swiss bank reported a net profit of 793 million francs ($826 million).

But they missed profit expectations for the quarter, with debt charges weighing against new investment banking operations.

For all of 2010, the Zurich-based bank generated 5.1 billion francs ($5.3 billion) net profit, about a quarter less than last year.

Credit Suisse managed to avoid the worst of the financial crisis, and unlike its larger cross-town rival, UBS, did not take government assistance during the global financial crisis. By cutting its risk, the bank was more reliant on client revenue, but benefited from some improvement in that area in the fourth quarter.

UBS AG, which underwent a radical restructuring after heavy losses and getting a bailout, on Tuesday reported fourth-quarter earnings of 1.29 billion francs ($1.35 billion), only a modest improvement from a year earlier.

Credit Suisse had stumbled in the third quarter, blaming challenging market conditions for results far below expectations. But in the fourth quarter pretax income from investment banking rose to 558 million francs ($580 million), up from 395 million francs ($406 million) in the previous quarter. Overall, the bank's wealth management division attracted 9.6 billion of net new client money.

Credit Suisse said it will now aim for a return on equity of more than 15 percent. The return in 2010 was 14.4 percent.

"Credit Suisse has continued to execute on its client-focused, capital-efficient strategy with an industry-leading return on equity of over 14 per cent," Credit Suisse CEO Brady Dougan said of last year's performance. "This has served us well through 2010, a year of transition toward the new regulatory environment."

Analysts at Evolution Securities Ltd., led by Piers Brown, noted that the bank had emerged from the credit crisis generally perceived as one of the winners, but that didn't translate into the expected market share gains last year.

Credit Suisse closed at 44.70 francs a share on Wednesday, a 19 percent gain in Zurich trading so far this year, after falling 26 percent in 2010.

[Associated Press; By JOHN HEILPRIN]

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