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Credit Suisse doubles net profit but still disappoints

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(Globalpost/GlobalPost)

Swiss banking giant Credit Suisse more than doubled its net profit last year, but still missed expectations amid big legal charges, a results statement showed on Thursday.

In 2013, the bank saw its net profit balloon to 3.06 billion Swiss francs ($3.38 billion 2.50 billion euros), up from 1.34 billion a year earlier.

Analysts polled by the AWP financial news service had expected to see the company pull in a net profit of 3.2 billion francs during the year.

The last three months of the year accounted for the miss, with net profit edging up only slightly to 267 million francs from 263 million in the fourth quarter of 2012, and slumping a full 41 percent compared to the third quarter, the bank said in a statement.

This came after the bank's private banking and wealth management division set aside 175 million francs to cover litigation charges related to a tax probe by US authorities -- Credit Suisse said it was "working towards a resolution".

Credit Suisse is one of 14 Swiss-based banks under investigation by the US over their suspected complicity in tax evasion by American citizens.

In common with Swiss banks in general, Credit Suisse is having to adjust to a new business environment, notably owing to an opening up of Swiss banking secrecy forced by the US probes and similar investigations elsewhere.

Credit Suisse also booked a provision of 339 million francs related to litigation over its investment bank's sale of mortgage-backed bonds.

Credit Suisse chief Brady Dougan was nonetheless upbeat about the results.

"In 2013, our priorities were to further improve profitability, continue to strengthen our capital position and reduce risks and leverage exposure, while expanding market share in targeted markets," he said in the earnings statement.

"We made strong progress towards these objectives," he said.

He also celebrated that the company had managed to cut its costs by 3.1 billion francs during the year, bringing it closer to its goal of slashing 4.5 billion in costs by 2015.

For 2013, the bank's board plans to hand out a dividend of 0.70 Swiss francs per share, down from 0.75 francs a year earlier.

Analysts, however, were critical of Credit Suisse's performance, contrasting it with that of rival Swiss player, UBS.

UBS had on Tuesday announced a huge swing back into profit in 2013 reaping the rewards of a radical overhaul notably of its investment banking arm.

Credit Suisse has also launched a restructuring programme, but it is less radical than that of UBS.

The market initially punished Credit Suisse harshly after the earnings announcement.

The price of shares in the bank fell by 1.85 percent to 26.55 Swiss francs in morning trading as the Swiss stock exchange's main SMI index remained flat.

But the shares closed 1.52 percent higher, at 27.46, while the SMI was up 1.30 percent.

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