Credit Suisse leveraged finance exposure now below CHF 1 billion

By Jennifer Lanning Drey

Portland, Ore., April 23 - Credit Suisse Group's exposure to leveraged finance was CHF 0.7 billion at the end of the first quarter, down from exposure of CHF 20.8 billion at the same point in 2008, the Zurich-based bank reported Thursday.

Since the end of third quarter of 2007, Credit Suisse has reduced dislocated assets by 92%, leaving commercial mortgage-backed securities as its last legacy area with material exposure, Paul Calello, chief executive officer of Credit Suisse's investment bank, said Thursday during the bank's first-quarter earnings conference call.

During the quarter, the investment bank was able to return to profitability, reflecting the progress in reducing risks. The investment bank reported income before taxes of CHF 2.41 billion, compared with a loss before taxes of CHF 3.42 billion in the comparable prior-year period.

Calello said foreign exchange and investment-grade trading achieved record results during the period, while there was improved activity in revenues from investment-grade debt issuance.

Within the investment bank, businesses targeted for repositioning, such as emerging markets trading, U.S. leveraged finance, equity trading strategies and convertibles returned to profitability.

Of the investment bank's CHF 6.4 billion of total net revenues, Credit Suisse estimates CHF 1.3 billion was due to more normalized market conditions.

Firm wide, Credit Suisse posted net income of CHF 2.0 billion in the first quarter of 2009.

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