GENEVA (AP) - Credit Suisse Group announced its first fourth-quarter net loss since 2008, posting negative returns Thursday of 637 million Swiss francs ($698 million) that were far below what analysts had expected.
Analysts' consensus estimates were for the Zurich-based bank to post a fourth-quarter profit for 2011 of 431 million francs. The loss compares with the 841 million francs profit that the bank posted in the fourth quarter a year ago.
The results from the second-biggest bank in Switzerland, whose economy has fared better than most other nations in debt-saddled Europe, further underscore the interconnectedness with the economic weakness in Europe and abroad, where the financial sector and governments are being forced to cut spending and pay for expensive bailouts.
Brady W. Dougan, chief executive officer of a bank that has some 50,000 staff around the world and manages more than $1 trillion in assets, blamed the loss on a difficult market and aggressive cuts in costs and risks, including the need to meet a new requirement that it hold more capital.
"Our performance for the fourth quarter 2011 was disappointing. It reflects both the adverse market conditions during the period and the impact of the measures we have taken to swiftly adapt our business to the evolving market and regulatory requirements," he said in a statement.
In the previous quarter the bank had reported a weak 683 million Swiss francs ($785 million) profit and announced 3 percent across-the-board job cuts by the end of 2013, an elimination of 1,500 jobs on top of earlier plans to trim 2,000 jobs.
Credit Suisse faces similar structural problem as crosstown rival UBS AG and has yet to close the book on a U.S. tax evasion probe.
On Tuesday, UBS AG, Switzerland's biggest bank, reported that its profit fell 76 percent in the fourth quarter. The bank was hurt by a $2 billion trading scandal last year and has been downsizing its investment bank to meet stricter capital requirements as Europe's debt crisis hits the financial sector.
Dougan said in mid-2011 the bank "decided to aggressively reduce risks and costs" and is on track with its program to reduce costs of 2 million francs by the end of 2013.
These measures, he said, along with "higher charges incurred due to the rapid execution of the cost-reduction programs, led to (the) negative impact of 981 million (francs) in the fourth quarter of 2011."