Credit Suisse may be forced to take writedowns

Shares in Swiss bank Credit Suisse fell by around 3 percent on Monday after a Swiss newspaper reported the bank faced writedowns in its commercial mortgage and leveraged-finance business.

Credit Suisse has until now emerged relatively unscathed from the U.S. subprime mortgage crisis which has forced many banks, including Credit Suisse rival UBS, to make huge writedowns.

A spokesman for Credit Suisse declined to comment on the report in Swiss Sunday newspaper Sonntag which predicted writedowns at the bank.

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Concerns that Credit Suisse’s exposure to commercial mortgages could come back to haunt it have weighed on the bank’s stock for months. Its shares fell 19.7 percent last year.

Credit Suisse is one of the most active global banks in arranging commercial mortgage-backed securities (CMBS). It is also a big player in arranging leveraged loans to finance buyouts of companies by investors.

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The bank has said it believes its exposure to CMBS, which it has declined to disclose, is manageable and says it sees no risk of the commercial property market in Europe and the United States suffering an implosion similar to the U.S. subprime mortgage market.

Exposure to the United States’ huge subprime market, which went into freefall in 2007 as borrowers with poor credit histories defaulted on loans, has forced tens of billions of dollars in writedowns among major banks such as UBS, Citigroup and Morgan Stanley.

Subprime-related writedowns by major banks at the end of last month amounted to more than $50 billion, according to a Reuters tally.