CSFB alarm as parent plunges

INVESTMENT bank Credit Suisse First Boston has warned that it will turn in a thumping loss for the fourth quarter of the year because of difficult market conditions and a major restructuring programme.

The warning came as parent, Swiss bank Credit Suisse, delivered a third-quarter loss of Swfr299m (£127.2m) against a Swfr1.6bn profit in the year-earlier period. The firm, which predicted the loss six weeks ago, blamed the economic environment and a large goodwill write-off following CSFB's acquisition of DLJ last year.

In the three months to end-September, CSFB had an operating loss of Swfr204m. The result reflected weak markets, reduced dealing activity and the impact of the 11 September terrorist attacks on the US. Revenues fell 17% but expenses were only 6% lower.

The decline came as CSFB cut wage costs by 8% and started its $1bn (£710m) cost-cutting programme, announced last month. The scheme involves cutting 2,000 employees and is scheduled for completion by the end of next year.