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Credit Suisse profits slump in 2011

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16:34 CET+01:00

Credit Suisse on Thursday posted a 62-percent drop in net profits last year to 1.95 billion francs ($2.1 billion) but offered an optimistic outlook for 2012.

The bank, the second-biggest in Switzerland, said that in the fourth quarter, the bank had had a net loss of 637 million francs, compared to a net profit of 841 million francs a year earlier.

"Our performance for the fourth quarter was disappointing," chief executive Brady Dougan said in a statement.

"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."

The results were down on analysts' expectations, who had predicted a 3-billion-franc full-year profit and 339-million-franc profit for the last quarter.

The bank reported a core results pre-tax loss of 998 million francs in the last three months which included charges of 981 million francs related to cost and risk reduction programmes.

Its full-year results were hit by low levels of client activity, the strong Swiss franc and cost cutting efforts, the bank said.

Dougan remained optimistic for 2012 however.

"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 percent, including the benefit from our risk and cost reduction plans," he said in a statement.

The bank said it would meet a goal to cut risk-weighted assets by 80 billion francs in the first quarter, well ahead of the previously stated year-end deadline.

It said it was also on track to cut costs by two billion francs by the end of 2013.

Analysts at Vontobel bank said although its last-quarter results were weak, the outlook reported by Credit Suisse was "rather positive."

The speedier-than-planned reduction of risk-weighted assets would be attractive to investors, experts at Notenstein bank added.

On the subject of an ongoing probe by US authorities into suspected tax evasion by American citizens hiding cash in Swiss bank accounts, Credit Suisse said only that it was working to resolve the dispute.

"Credit Suisse continues to cooperate with the authorities both in the US and Switzerland to resolve this matter in a responsible manner that complies with its legal obligations," the bank said.

The bank proposed a dividend of 0.75 Swiss francs per share, down from 1.30 francs a year earlier.

The Credit Suisse share price was down 2.5 percent to 24.58 francs a share towards 0920 GMT.

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