Credit Suisse said yesterday it was axing 2,000 jobs at its investment banking arm CSFB, as it surprised the market with a hefty third-quarter loss reflecting write-downs on its insurance holdings and airline exposure.
In an earnings statement brought forward to meet US disclosure requirements, the Swiss financial group fell to a net loss of 300 million Swiss francs (€202.4 million) from a profit of SFr1.29 billion in the previous three months.
Investment banking arm CSFB suffered an operating loss of about $120 million (€131 million), as revenues shrank some 20 per cent because of tough markets made even worse by the financial shock following the attacks in the United States.
Analysts said the biggest surprise was the scale of the write-down on investments in stocks including Swiss Life, Switzerland's largest life insurer, as well as former blue-chip airline Swissair which sought court protection from creditors last week.
In the past year, most analysts had focused on Credit Suisse's potential exposure to risky telecoms and technology sectors through CSFB.
Yet the problems that have surfaced were closer to home in holdings once considered low risk.
Credit Suisse also said its insurance business including Winterthur "will report significantly lower results in the second half of 2001 due to lower investment income".
Credit Suisse is one of the world's largest private wealth managers and also has a major institutional asset management business.
It managed SFr1.452 trillion in client assets at the end of June.
It is expected to give more details on the performance of its asset-management activities when it reports full third-quarter results on November 20th.
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