UPDATE 5-C.Suisse says at strongest since crisis hit

* Strong start to this year with good money inflows
* Q4 net profit 783 mln Sfr, misses 1.3 bln forecast

* Private banking inflows 6.4 bln Sfr, below forecasts

* Pretax profit at investment bank slows to 1 bln Sfr
* Shares up 1.3 percent, outperform bank index

(Adds figures on European offshore money)

By Lisa Jucca

ZURICH, Feb 11 (BestGrowthStock) – Credit Suisse (CSGN.VX: ) boss
Brady Dougan said the Swiss bank was winning client money and
transactions faster than at any point since the financial crisis
began, putting a positive sheen on weak quarterly earnings.

Investors welcomed Dougan’s upbeat comments after initial
disappointment that fourth-quarter earnings missed forecasts on
Thursday as investment banking slowed and came in below
arch-rival UBS’ (UBSN.VX: )(UBS.N: ) fourth-quarter net profit.

Credit Suisse, which unlike UBS weathered the global crisis
without state aid, has rebounded under the leadership of former
investment banker Dougan. It posted a 6.7 billion Swiss francs
($6.3 billion) profit in 2009 from a 2008 record loss, mostly
due to its best-ever investment banking performance.

“Perceptions on Credit Suisse have improved a lot, and it
was clear things were better in January,” said fund manager
Helmut Hipper at Union Investments, which holds more than 3
million shares in Credit Suisse, or 0.28 percent of shares.

“The numbers were a little disappointing, very weak on sales
and trading, in fixed income especially, although they made up
some ground on costs,” Hipper said.

Shares were up 1.3 percent 46.71 francs by 1224 GMT on
Thursday, compared with a 0.72 percent fall in the DJ Stoxx
European banking index (.SX7P: ) while UBS shares were up 0.44

Credit Suisse’s fourth-quarter bottom line was hit by weaker
results at its investment bank. Profit from the division nearly
halved from the third quarter as trading profit in equities
slowed and shrunk to a third in fixed-income due what division
chief Paul Calello said was “low client activity”.

That follows weaker trading profits at both JP Morgan
(JPM.N: ) and Goldman Sachs (GS.N: ), indicating conditions weakened
at the end of 2009. [ID:nN15183524] [ID:nN21197777]

The bank’s fourth-quarter net profit was the weakest of all
quarters last year, but American-born Dougan was confident for

“We have a had a strong start to the quarter with strong
client activity. Our transaction pipeline and net new asset
flows are the best we have seen since the crisis,” he said.

Despite a weakening of Swiss bank secrecy and attacks from
foreign states on Switzerland’s multi-trillion dollar offshore
banking industry (Read more about the banking industry recovery.), Credit Suisse continued to attract cash from
wealthy clients throughout the year, although inflows slowed in
the fourth quarter after an Italian tax amnesty.

Dougan said Credit Suisse could loose a maximum of 25
billion francs if other major European countries were to conduct
tax amnesties as aggressive as the Italian one.

Dougan also disclosed for the first time that the bank held
around 100 billion francs of potentially undeclared tax money
from Italian, German, French and British clients, or just over
10 percent of the 915 billion francs its private bank manages.

Credit Suisse, now Switzerland’s largest by market value,
has managed to raise private capital during the crisis, slash
exposure to illiquid assets, boost its capital ratios and is
exiting the most risk-prone segments of investment banking.

(For a Credit Suisse graphic, click

http://graphics.thomsonreuters.com/0210/SW_UBSCS0210.gif )

For a Breakingviews column, click [ID:nLDE61A0RI]

For a story on Credit Suisse bonuses, click [ID:nLDE61A0QE]


Fourth-quarter profit (Read more your timing to make a profit.) of 783 million francs was below
expectations of 1.3 billion in a Reuters poll. [ID:nLDE6121I2]

UBS surprised the market on Tuesday when its first quarterly
profit in more than a year came in at 1.2 billion francs, well
above expectations, though the fourth-quarter figure was
overshadowed by accelerating outflows from its core
wealth-management division. [ID:nLDE61802M]

“Fourth-quarter results are definitely weaker than expected,
but a very strong beginning of the year, including net new
money, indicates they may be able to gain market share,” said
Georg Kanders, an analyst at WestLB Research.

Credit Suisse’ net was hit by a 500 million franc pretax
charge following a U.S. settlement for hiding transactions on
behalf of clients from countries subject to U.S. sanctions like
Iran. [ID:nN16116989] A recurring accounting loss on own credit
to the tune of 300 million francs also took its toll.

Even though Credit Suisse continued to win client money in
the fourth quarter, new client inflows of 6.5 billion francs were
below analyst’s expectations of 8 billion and lower than in all
previous quarters of the year due to the Italian tax amnesty.

Credit Suisse has capitalised on its main rival’s weakness
and won market share, attracting more than 42 billion francs of
new client money in private banking in 2009 against an outflow
of nearly 150 billion francs UBS suffered in the same year.

January had been a record month for inflows, the bank said.

“We continue to see wealth management as an attractive
growth market,” Chief Financial Officer Renato Fassbind said.

Investment Tools

(Additional reporting by Martin De Sa’Pinto; Editing by Jon
Loades-Carter, Erica Billingham and Karen Foster)
($1=1.063 Swiss Franc)

UPDATE 5-C.Suisse says at strongest since crisis hit