Switzerland's second-largest bank said it also had net writedowns of 5.3 billion francs for big buyout loans and mortgage securities.

It was the first time the bank, Switzerland's second largest, had posted a loss in the subprime crisis that has caused its crosstown rival UBS AG to write down US$37.4 billion in assets because of bad investments in U.S. mortgage securities.

For the fourth quarter of 2007 Credit Suisse posted a revised net profit of 540 million francs.

'Our first-quarter results are clearly unsatisfactory,' Credit Suisse Chief Executive Brady Dougan said, but he said other operations of the bank did well.

Credit Suisse is the first of the major European investment banks to report the quarter, but others have warned investors to brace for more write-downs.

Germany's Deutsche Bank AG has said it expects to post euro2.5 billion (S$5.39 billion) in markdowns for buyout loans and mortgage securities, while UBS expects a net loss of 12.45 billion francs because of its subprime exposure.

Credit Suisse said it has continued to reduce exposure to risk in the market and that other areas of its operations performed well The bank posted a net profit of 2.7 billion francs in the first quarter of 2007.

Credit Suisse shares, which have slid 43 per cent in the last 12 months, closed at 52.55 francs on Wednesday, giving the bank a market capitalization of 61.6 billion francs.

'Other than the areas affected directly by the credit crisis, most of our businesses performed well, with revenues near, or in some cases above, those in the first quarter of 2007,' Mr Dougan said.

He said the bank 'remains well positioned in an extremely challenging environment.'

Credit Suisse's capital position is strong, Mr Dougan said, adding that the bank would continue to manage its liquidity conservatively.

'I am confident that we will continue to serve as a safe haven for clients in uncertain and volatile markets, and to seize the opportunities that arise in times of market dislocation to create long-term value,' Mr Dougan said.

Credit Suisse took the bulk of its writedowns - 2.66 billion francs - for collateralized debt obligations.

But it also marked down 1.68 billion francs for buyout loans granted but failed to sell to investors and 944 million francs for mortgage securities.

Credit Suisse trimmed its exposures to the troubled areas during the quarter.

Leveraged loans outstanding fell to 20.8 billion francs from 35.1 billion francs at the end of last year. Subprime CDOs shrank to 700 million francs from 1.6 billion francs. -- AP