Credit Suisse is the Latest Swiss Bank to Disappoint

Credit Suisse reported an unexpected 4th quarter net loss of 637 million Swiss francs ($699 million) on Thursday, compared to a profit of 841 million francs during the same quarter a year earlier. An earlier poll of analysts by Reuters indicated an average analyst estimate of a 430 million franc profit. The bank also said that it would drastically reduce its dividend from last year's 1.30 francs down to 0.75 francs. Chief Executive Officer Brady Dougan blamed a 981 million franc restructuring charge for most of the loss, as the bank sped up a plan to reduce risk and exit unprofitable businesses. Poor performance by Credit Suisse's investment banking unit also contributed to its unexpected loss. Credit Suisse was the latest Swiss banking giant to report disappointing earnings, following the Tuesday announcement from UBS AG

that the bank's 4th quarter net profit plummeted 76% to 393 million Swiss francs, down from 1.66 billion Swiss francs a year earlier. Like UBS (

), Credit Suisse is hoping that its wealth management business can make up for losses in its investment banking unit but that hasn't happened yet. The two banks are also involved in legal disputes in the United States. American authorities are investigating whether or not Credit Suisse took part in tax evasion while managing the accounts of its American clients. The fact that two Swiss banking giants issued disappointing earnings reports within days of each other could be seen as a warning sign. Although risk reduction played a major role in the results reported by Credit Suisse and UBS, many of the two banks' business units are underperforming.