Credit Suisse piled pressure on UBS, its larger rival, yesterday as it cut its sub-prime writedown by SwFr200 million (£182 million) and lifted the annual dividend to SwFr2.5 per share after making SwFr8.5 billion profit in 2007.
UBS, which reports fourth-quarter results tomorrow, has taken $18.4 billion (£9.4 billion) of charges from investments in American mortgages.
Credit Suisse, whose shares gained SwFr1.40 to SwFr57.50, made a SwFr1.3 billion profit from continuing operations in the last quarter of 2007.
It wrote off SwFr1.3 billion on leveraged finance and sub-prime related investments for the period, but some of its hedges in the year were profitable so it cut its writedown for 2007 from SwFr2.2 billion to SwFr2 billion.
Meanwhile, the supervisory board of KfW, the German government-controlled bank, will consider today whether to go ahead with a €1 billion (£746 million) bailout of its rival IKB.
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KfW may issue a bond that could be converted into Deutsche Post shares to raise the cash needed to save IKB, which has been hit by the credit crisis.
Peer Steinbr?ck, the Finance Minister and deputy chairman of KfW’s supervisory board, said: “The collapse of a bank could have a widespread effect, which no one wants.”
IKB almost went bust last August after investing in sub-prime securities.