Credit Suisse CEO Disappointed, But Firm Off To A Decent 2012

Credit Suisse posted a surprise Q4 loss Thursday, mainly as a result of charges related to restructuring of the investment bank and offloading risky assets.

The firm posted a $700m Q4 loss, with the investment bank losing $1.44bn.

Brady Dougan, Credit Suisse's CEO, said: '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

'In mid-2011, we decided to aggressively reduce risks and costs. This decision was rooted in our belief that the market and regulatory environment is undergoing fundamental change, and that by embracing these developments and proactively adjusting our business model, we can position Credit Suisse to succeed in the new environment. The regulatory developments and the subdued market environment in the second half of 2011 have confirmed our views. The accelerated implementation of the risk reduction plan and our measures to exit businesses that are no longer expected to deliver attractive returns in the changed regulatory environment, as well as higher charges incurred due to the rapid execution of the cost reduction programs, led to negative impact of $1.07bn in the fourth quarter of 2011. We are taking these steps in order to reduce risk and deploy our balance sheet to our client-focused growth businesses, which offer attractive returns in the new environment. This will position us well to achieve superior returns to the benefit of our clients and shareholders.

'While we are mindful that the market and economic environment remain uncertain, we are encouraged that our business is off to a good start with year-to-date underlying return on equity consistent with our target level of 15%, including the benefit from our risk and cost reduction plans. We have accelerated the reduction of risk-weighted assets and expect to reach the risk-weighted assets level originally targeted for the end of 2012 by the end of the first quarter 2012. Furthermore, we are on track with our $2.2bn cost reduction program, which is to be completed by year end 2013, and expect our results and costs, excluding the costs from PAF2, to reflect the annualized reduction in our cost base of $1.31bn beginning in the first quarter 2012'.