Risk management will feature among his responsibilities.ĬSFB's results only serve to underline the heavy risks of investment banking operations. Thornburgh, chief financial officer of Credit Suisse Group, will take up the post of Vice-Chairman of Credit Suisse First Boston effective April 1. The move is along the lines of similar action last week at UBS. The scale of the write-downs was large enough to prompt the banking group into a management reshuffle in what analysts said was an attempt to exert greater control over maverick investment bankers and brokers. 'We believe the Russian losses were quite a bit bigger than those disclosed,' said one analyst who did not want to be named. Net operating income rose by a more 3 percent to 21.7 billion francs.Īnalysts suspect, however, that the Swiss accounting system may have allowed the group to hide some of CSFB's losses. Overall, CS Group posted a jump in 1998 profit after extraordinary items to 3.1 billion francs from 397 million francs. Problems in Brazil are also said to have played a damaging role.Īs a result of the emerging market losses, the investment banking operation reported a net loss of 221million Swiss francs ($154 million) last year, a sharp reversal from profits of 1.573 billion francs in 1997. The Russian crisis, which knocked some 95 percent off the value of Russian government bonds and wiped 85 percent off equities, left CSFB having to write down $1.3 billion. The inherent volatility of earnings from securities operations will focus minds on two big deals expected later this year: Deutsche Bank's takeover of Bankers Trust and Goldman Sachs' proposed flotation. Its Warburg Dillon Read unit lost over 1 billion Swiss francs ($680 million) due to its exposure to Russia and mismanagement of its derivatives operation. The losses, chiefly caused by last year's financial meltdown in Russia, were widely anticipated and came only days after rival UBS reported similar problems. Swiss banking giant CS Group revealed Tuesday that the only part of its business to go into the red was its Credit Suisse First Boston investment banking unit. LONDON (CNNfn) - Results from two of Europe's biggest banks this week highlighted the dangers of putting too much faith in the profit-generating potential of blue-chip investment banks. Investment banking proves financial black hole for Swiss giants Credit Suisse hit by $1.3B write-off at CSFB - Mar.

Credit suisse writedown