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27th April 2012

Credit Suisse nominal profit after fair value losses

Credit Suisse reported Q1 net attributable of CHF44m (€37m £30m $48m ¥3.9bn Y304m) DOWN from CHF1,139m in the year ago period. The bank estimated its 'normalised' net income as CHF1,355m. The difference is primarily related to fair value losses of CHF1,554m. The bank announced significant acceleration of its restructuring program in several different statements this year and CEO Brady Dougan reported that many of the financial restructuring objectives targeted for completion by year end had been completed during the first quarter. ROE was just 0.5% however, though under the 'normalised' view this jumps to over 15%.


Though analysts generally buy into the Dougan strategy the share price is only a little over half that it started 2011 on. The share price fell only marginally on the day of the announcement but had been falling over the previous two days. Dougan reduced the banks risk weighted assets (Basel III) by CHF 45bn in the quarter, 13%, giving an important boost to its capital ratios.


Income summary Q1 2012 2011 Change
CHFm CHFm %
Net interest income 1,861 1,732 7.4%
Commissions and fees 3,179 3,679 -13.6%
Trading revenues 180 2,004 -91.0%
Other revenues 658 398 65.3%
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Net revenues 5,878 7,813 -24.8%
Provision for credit losses 34 (7) 0.0%

Compensation and benefits 3,707 4,025 -7.9%
General and administrative expenses 1,646 1,634 0.7%
Commission expenses 451 536 -15.9%
Other operating expenses 2,097 2,170 -3.4%
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Total operating expenses 5,804 6,195 -6.3%

Profit before Tax 40 1,625 -97.5%
Income tax expense/(benefit) (16) 465 --
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Net Income 56 1,160 -95.2%
Non-controlling interests 12 21 -42.9%
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Income attributable to shareholders 44 1,139 -96.1%