Credit Suisse misses profit forecast after legal charges

Thu Feb 6, 2014 5:55am EST
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By Katharina Bart

ZURICH (Reuters) - Credit Suisse CSGN.VX missed expectations with a marginal uptick in fourth-quarter net profit on Thursday after increased legal costs arising from U.S. 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 (DBKGn.DE: Quote) 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 263 million a year earlier, after taking a 339 million franc provision over mortgage litigation at its investment bank and a 175 million franc one for a U.S. probe into hidden offshore accounts in Switzerland.

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

"They are definitely haunted by the past. Operationally they don't look that strong either. It's a kind of new normal. Like every other bank, they have one-offs," said Rainer Skierka, analyst with private bank J. Safra Sarasin in Zurich.

"This looks quite weak. Especially investment banking looks quite weak. In investment banking they are not catching up with competitors on the cost base."

Credit Suisse shares were down 1.7 percent in early trading.   Continued...

Brady W. Dougan, CEO of Credit Suisse, addresses the full year results conference in Zurich February 6, 2014. REUTERS/Denis Balibouse