CSFB alarm as parent posts loss

INVESTMENT bank Credit Suisse First Boston today 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 CSFB's parent company, Swiss bank Credit Suisse, delivered a third-quarter loss of Swfr299m (£127.2m) against a Swfr1.6bn (£880m) profit in the same period last year. The loss, predicted by the firm six weeks ago, was blamed on the troublesome 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 began to implement its $1bn (£710m) cost reduction programme, which was announced last month.

The scheme involves a culling of the workforce by 2000 employees and is scheduled for completion by the end of next year.