Credit Suisse warns expects no Q1 profit

Thu Mar 20, 2008 2:58am EDT

ZURICH (Reuters) - Credit Suisse (CSGN.VX: Quote, Profile, Research) said it was unlikely to post a profit in the first quarter of 2008 due to big debt writedowns and difficult markets, but the shock writedowns it revealed in February were not as bad as first thought.

The bank said in a statement on Thursday that it was profitable through to the end of February but that market conditions were difficult in March.

"In light of the difficult market conditions in March, at this time, Credit Suisse believes it is unlikely to be profitable in the first quarter," the bank said in a statement.

The bank reduced its previously announced estimate for writedowns related to asset-backed securities by 200 million Swiss francs to 2.86 billion francs.

In February, the bank shocked markets by writing down $2.85 billion in asset-backed investments and suspending some traders after finding pricing errors on its books.

The bank had previously said it expected to post a profit for the first quarter and estimated that the writedowns would wipe $1 billion off its net income, after taking into account tax credits and cancelling some staff bonuses.

Credit Suisse said it would post a writedown of 1.18 billion francs against its 2007 accounts -- which translated into a hit of 789 million francs net of tax -- and of 1.68 billion francs against its first quarter 2008 accounts as a result of the new valuations.

The writedowns are the latest in a string of shocks from global banks, including huge new subprime-related exposures at rival UBS (UBSN.VX: Quote, Profile, Research) and the emergency takeover of U.S. investment bank Bear Stearns (BSC.N: Quote, Profile, Research) by rival J.P. Morgan

(JPM.N: Quote, Profile, Research).

Credit Suisse had previously reported subprime-linked writedowns of 2 billion Swiss francs in 2007.

(Reporting by Thomas Atkins, editing by Will Waterman)