Islands key as Credit Suisse tackles crunch

By Tom Edwards

We remain an important hub for the group, said Roy McGregor, Credit Suisse’s chief executive for the Channel Islands. (0356265)

GUERNSEY remains a key hub for Credit Suisse as the group loses billions due to the credit crisis.

The Swiss bank’s losses were due to problems in international credit markets. It has suffered a net loss of $2.1bn. in the first quarter of 2008, compared to a profit of $2.7bn. in the same period last year.

Chief executive Brady Dougan described the results as ‘clearly unsatisfactory’ and declined to give a clear outlook on the future, according to the Financial Times. In Guernsey, chief executive for the Channel Islands Roy McGregor said its banking, trust and fund business continued to grow and attract new clients.

But, in line with the bank’s policy, he would not reveal details of how its local operation had fared in the credit crisis.

‘The Channel Islands remain a key hub for the group and, where practical and profitable, we will seek to further build and consolidate that position in the future.’

Credit Suisse wrote down £850m. on leverage finance such as loans to finance private-equity deals and a further £400m. on commercial mortgages.

It said conditions had improved this month, but stressed it was not counting on an upturn yet and that there may be further write-downs to come.

In Guernsey, Mr McGregor said the first quarter results reflected the extreme disruption seen in credit markets.

Its Bank of International Standards tier one ratio under the new Basel II regulations – which is the ratio of a bank’s core equity capital to its risk-weighted assets – was 9.8% at the end of March.

This compared favourably to a British banking sector average of 5.8% and a European average of 6.5%.

‘Credit Suisse continues to be among the world’s best capitalised and most liquid institutions and this provides us with tremendous

financial and strategic flexibility,’ said Mr McGregor.

The bank’s losses from the credit crunch are small compared with those of its bigger competitor UBS, which has so far suffered losses of $37.4bn.