Credit Suisse returns to profit

Credit Suisse's results mark a distinct turnaround

Credit Suisse has returned to quarterly profit following a strong recovery by its investment banking division.

For the first three months of 2009, the lender made a net profit of 2bn Swiss francs ($1.7bn; £1.2bn).

This follows a loss of 6bn Swiss francs between October and December of last year, when it was forced to write down billions of francs of bad debts.

The bank's investment banking business made a profit of 2.4bn Swiss francs between January and March.

The return to profit at Switzerland's second largest bank came after it reduced its global workforce by 5,100 positions or 11% last year.

'Further strengthening'

Credit Suisse chief executive Brady Dougan said the bank's latest results "show the benefit of the measures we took last year across the bank, including cost reductions and the further strengthening of our capital position".

The results were very good, especially the development in investment banking, that reminds us of the good old days Swiss trader

The first quarter net profit of 2bn Swiss francs was twice as much as analysts had predicted. It compares with a loss of 2.15bn Swiss francs for the same period a year earlier.

For 2008 as a whole, Credit Suisse made a loss of 8.2bn Swiss francs, its largest ever.

"We remain optimistic about the prospects for Credit Suisse, particularly in the context of the overall industry," added Mr Dougan.

Analysts broadly welcomed the bank's latest results.

"The results were very good, especially the development in investment banking, that reminds us of the good old days," said one Swiss trader.

"The crisis began 18 months ago and some banks like Credit Suisse have had the time to put their business back in shape."

Sector-wide recoveries

Credit Suisse is just the latest global bank to report forecast-beating profits for the first three months of 2009, as the banking sector continues to show signs of recovery.

Goldman Sachs last week reported a $1.8bn (£1.2bn) profit, compared with a loss for the last three months of 2008.

And fellow American bank JP Morgan Chase announced a profit of $1.6bn.

However, woes continue at UBS, Credit Suisse's largest Swiss rival.

UBS last week reported a 2bn Swiss franc first quarter loss, saying it would now shed 8,700 jobs by next year as it continues work to cut costs and turnaround the business.