Feb. 11 (Bloomberg) -- Credit Suisse Group AG, Switzerland’s second-biggest bank, reported a record fourth-quarter loss after the worst financial crisis since the Great Depression battered trading results.

The net loss amounted to 6.02 billion francs ($5.2 billion), the Zurich-based bank said today, exceeding the 4.2 billion-franc estimate of analysts surveyed by Bloomberg. For 2008, the deficit totaled 8.2 billion francs.

Credit Suisse’s results, a day after UBS AG posted the biggest loss in Swiss history, show how even banks that initially dodged the worst of the financial crisis got swept along when the September collapse of Lehman Brothers Holdings Inc. shook stock and bond markets. Chief Executive Officer Brady Dougan, who announced 5,300 job cuts in December, told reporters that while he doesn’t want to give “a light at the end of the tunnel message,” he’s “optimistic” about the business.

“It’s been a horrible few months for all banks, but in the case of Credit Suisse it’s been even worse than expected,” said Rainer Skierka, senior analyst at Bank Sarasin in Zurich, in a Bloomberg Television interview.

Credit Suisse rose 32 centimes, or 1 percent, to 31.20 francs in Zurich, after falling as much as 8.3 percent earlier in the day. The stock is down 44 percent over the past 12 months, compared with a 61 percent drop at Zurich-based UBS and a 60 percent slump in the Bloomberg Europe Banks and Financial Services Index in the same period.

‘Strong Start’

“We’ve had a strong start to the year and all of our businesses are profitable quarter to date,” Dougan said in an interview in Zurich today. “We’re well positioned. I hope market conditions will allow us to have a profitable” 2009.

Credit Suisse lowered its “mid-term” goal for return on equity, a measure of profitability, to 18 percent from more than 20 percent. The bank raised the minimum target for its Tier 1 capital ratio, a cushion against losses, to 12.5 percent from 10 percent.

Achieving that level of profitability in a way that’s not volatile is “going to mean that we stack up extremely well against the rest of the industry,” Dougan said. He expects higher returns from money-management operations and lower returns from the securities unit.

The investment bank had a pretax loss of 7.78 billion francs in the quarter after 3.19 billion francs of writedowns on leveraged loans and structured products and as trading hedges failed. Credit Suisse also had about 600 million francs in costs related to cutting jobs. Unlike UBS, the biggest Swiss bank, Credit Suisse declined government aid to split off toxic assets.

New Money

“We’re disappointed with Credit Suisse investment bank’s performance,” Kian Abouhossein, an analyst at JPMorgan Chase & Co., said in a note to clients. “The overall results are poor.”

Profit at the private banking unit fell 36 percent to 876 million francs, hurt by a 407 million-franc provision for auction-rate securities. The asset management division had a loss of 670 million francs after the value of private equity and other investments had to be marked down by 599 million francs.

Credit Suisse plans a cash dividend of 10 centimes a share for 2008, compared with 2.5 francs for the previous year.

The bank attracted 2 billion francs of net new money from wealthy clients in the fourth quarter, down from 11.3 billion francs in the third as clients pulled assets they had purchased with borrowed cash to repay loans.

“Net new money is slightly below what we expected, but comes in a difficult environment,” said Teresa Nielsen, an analyst at Bank Vontobel in Zurich who rates the bank “hold.”

Biggest Loss

Dougan said Credit Suisse was attracting new funds so far this quarter at a similar pace to 2008, and hasn’t seen deleveraging effects continue. UBS, the world’s biggest money manager for the rich, saw clients withdraw a net 54.2 billion francs from its wealth management units in the fourth quarter.

UBS yesterday reported a record 19.7 billion-franc loss for 2008 and said it will cut 2,000 more jobs at the investment bank to return the unit to profitability. Deutsche Bank AG, Germany’s biggest bank, last week reported a record 4.8 billion-euro ($6.3 billion) loss for the fourth quarter and its first annual deficit in more than 50 years.

Financial institutions worldwide have amassed $1.09 trillion of losses and shed about 274,000 jobs since the U.S. subprime mortgage market collapsed. The U.S., Britain, France and Germany are among countries that have propped up banks to prevent a wider financial disaster.

Bonus Cuts

Dougan said “it’s hard to predict” how markets will develop for the rest of this year, though Credit Suisse “ought to be able to withstand difficult markets if they come.” He added the latest round of job cuts puts the bank in “the right position for the markets as they seem to be performing today.”

Credit Suisse plans to reduce staff at the investment bank to 17,500 by the end of this year from 21,300 at the end of September, the bank said in December. UBS intends to cut the employees at its securities unit to 15,000 by the end of 2009.

Credit Suisse lowered bonus payments at the investment bank by about 55 percent, two people familiar with the situation said last week. The bank had already said it would use illiquid securities such as leveraged loans and commercial mortgage-backed debt to pay part of the bonuses and introduce changes to allow it to claw back pay from recent years. Dougan, Chairman Walter Kielholz and Paul Calello, head of the investment bank, are forgoing bonuses for 2008.

Bonuses fell 44 percent companywide, with greater reductions for senior staff, Dougan said today.

Dougan, 49, who took over as CEO in May 2007 after heading the investment bank for three years, has said he foresees no circumstances under which state aid would be required. Credit Suisse raised 10 billion francs from investors in Qatar, Israel and Saudi Arabia in October to replenish capital.

Capital strength has helped Credit Suisse win client advisers and assets from the rich, according to Dougan. The bank hired 340 new client advisers in 2008, added 42.2 billion francs in new assets from wealthy customers and reiterated plans to increase the number of advisers to 4,100 by the end of 2010 from 3,480 as of Dec. 31.

To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net

Last Updated: February 11, 2009 11:59 EST