Shares of Credit Suisse Group (NYSE: CS) are trading higher despite that fact that the company reported a loss for the first three months of the year, hit by its exposure to the credit markets. European shares didn't react to well though as it was the bank's first quarterly loss in five years.Credit Suisse posted a first quarter net loss of $2.1 billion as the global effects of the U.S. subprime mortgage crisis came with substantial write-downs. Thus, the company was forced to write down 5.3 billion francs ($5.3 billion) in mortgage securities and big buyout loans.
Making some comments on its quarterly earnings figures, the company stated its dissatisfaction with the current results, but on the positive side "most of our businesses performed well, with revenues near, or in some cases above, those in the first quarter of 2007." Looking ahead, the company's Chief Executive Brady Dougan is confident that Credit Suisse "will continue to serve as a safe haven for clients in uncertain and volatile markets, and to seize the opportunities that arise in times of market dislocation to create long-term value."
Credit Suisse opens the way of other major European investment banks that will report their quarterly earnings numbers. However, with the current challenging market conditions traders are already used with weak profits results so warnings about more further write-downs from big banks such as Germany's Deutsche Bank AG (NYSE: DB) or UBS AG (NYSE: UBS) are note quite a surprise.
So why is the stock up 1.82%? Well...it looks like Credit Suisse's losses from the credit crisis are tiny compared with those of its bigger rival UBS, which has so far made $37.4 billion of losses. Looks like traders are seeing CreditSuisse as the better option in the current environment.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
Entrepreneur's Journal: Putting together a solid sales contract
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Reader Comments (Page 1 of 1)
5-23-2008 @ 4:31AM
christine said...
this is good