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Credit Suisse Q4 profit hit by legal cost

Zurich, February 7, 2014

Credit Suisse missed expectations with a marginal uptick in fourth-quarter net profit yesterday after increased legal costs arising from US probes into alleged tax evasion and the sale of mortgage-backed bonds.

Credit Suisse is cutting back on riskier areas of business in the wake of the financial crisis and tougher regulation, but - as with many rivals - litigation headaches continue to swirl around Switzerland's second-largest bank.

Deutsche Bank last month blamed litigation costs for a surprise fourth-quarter loss.

Zurich-based Credit Suisse posted net profit of 267 million Swiss francs ($296 million) from 263m a year earlier, after taking a 339m franc provision over mortgage litigation at its investment bank and a 175 million franc one for a US probe into hidden offshore accounts in Switzerland.

Analysts had on average forecast fourth-quarter net profit of 448 million francs.

Profits at Credit Suisse's investment bank were weighed by a 525 million franc loss due to shifting its undesired investment banking activities into a bad bank.

The investment bank posted a pretax loss of 40 million francs. Similar to rivals, its interest rates business suffered from a sharp drop in activity, while equities, credit and underwriting securities were healthier.

Compensation costs at the investment bank rose by over a fifth from the third quarter but overall, Credit Suisse said it was on track to cut spending by 4.5 billion francs by end-2015.

Credit Suisse said it would pay a 0.70 franc per share dividend, in cash. The bank paid a largely stock dividend of 0.75 francs in 2012, and flagged a return to cash when it met key capital ratios, which it did during the year.-Reuters




Tags: Credit Suisse |

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