Credit Suisse admits missing fourth quarter profit expectations

Credit Suisse today admitted it missed profit expectations in the fourth quarter because of debt charges as investment banking hires began to paying off with good client momentum boosting the unit's profit.

Investment banking pretax income rose to 558 million Swiss francs from a lacklustre 395 million francs the previous quarter, Switzerland's second-largest bank said today.

But the bank benefitted from the same improvement in client activity seen at cross-town rival UBS on Tuesday, both bucking a disappointing trend set by other big competitors like Goldman Sachs.

Chief Executive Brady Dougan, feted for keeping the bank clear of the worst of the financial crisis, hired investment bankers aggressively in the second quarter of 2010 just as markets flattened. His bold strategy has so far backfired as trading revenues wilted in the third quarter and have since remained poor, though Credit Suisse is widely seen as well placed to benefit from any upturn in trading activity.

Credit Suisse attracted 9.6 billion of net new client money to its wealth management arm, which has held up well throughout the crisis, benefitting from client leaving in droves from UBS, which was rescued from the brink by the Swiss state after massive writedowns on toxic assets.