hr: Money

Credit Suisse Group declared a $2.1 billion net loss for the first quarter as the global effects of the U.S. subprime mortgage crisis continued to spread. This is a first in the history of Switzerland’s second largest bank.

The company also disclosed net writedowns of $5.3 billion for big buyout loans and mortgage securities.

Although other operations of the bank did well, “[o]ur first-quarter results are clearly unsatisfactory,” said Chief Executive Officer Brady Dougan.

Credit Suisse is the first of the major European investment banks to report the quarter, but others have warned investors to brace for more write-downs.

The bank posted a net profit of $2.7 billion in the first quarter of 2007; however, Credit Suisse shares slid 43% in the last 12 months, despite efforts to reduce exposure to risk in the market.

“Other than the areas affected directly by the credit crisis, most of our businesses performed well, with revenues near, or in some cases above, those in the first quarter of 2007,” CEO Dougan said.

He said the bank “remains well positioned in an extremely challenging environment.”

Credit Suisse’s capital position is strong, Dougan said, adding that the bank would continue to manage its liquidity conservatively.

“I am confident that we will continue to serve as a safe haven for clients in uncertain and volatile markets, and to seize the opportunities that arise in times of market dislocation to create long-term value,” Dougan said.

Credit Suisse took the bulk of its writedowns - $2.64 billion - for collateralized debt obligations.

But it also marked down $1.67 billion for buyout loans granted but failed to sell to investors and $937 million for mortgage securities.

Credit Suisse trimmed its exposures to the troubled areas during the quarter. Leveraged loans outstanding fell to $20.6 billion. Subprime CDOs shrank to $695 million from $1.6 billion.