Credit Suisse Group reported a net loss of 1.26 billion Swiss francs (US$1.08 billion) for the third quarter, as it forecast earlier this month, compared with net income of CHF 1.3 billion in the third quarter of 2007.

Core net revenues were CHF 3.1 billion, down 48% from the third quarter of 2007. Private banking, which comprises the wealth management and corporate & retail banking businesses, reported income before taxes of CHF 789 million, a decrease of 39% from the third quarter of 2007. Within that segment, wealth management was down 57%, whereas corporate & retail banking income was up 3% from the same period in the previous year.

Investment banking reported a the loss before taxes of CHF 3.2 billion in the third quarter of 2008, compared with income before taxes of CHF 6 million in the third quarter of 2007. Net revenues were negative CHF 515 million compared with positive CHF 2.1 billion in the third quarter of 2007, due to the widespread market disruption, particularly in September, that adversely affected most businesses.

The asset management business also saw a loss before taxes of CHF 58 million in the third quarter of 2008, compared with income before taxes of CHF 45 million in the third quarter of 2007. The loss reflected private equity and other investment-related losses of CHF 109 million and net writedowns from securities purchased from Credit Suisse’s money market funds.

Brady Dougan, CEO of the firm, said, “The financial services sector witnessed unprecedented market disruption in September and extraordinary changes to the competitive landscape. These events led to a very difficult operating environment, particularly in investment banking. The result in investment banking reflects further writedowns in our leveraged finance and structured products businesses and other losses resulting from the exceptionally adverse trading conditions in September. This led to an overall net loss for Credit Suisse in the third quarter. While understandable in the context of the market environment, this result is clearly disappointing.”

“Consistent with our strategy, we will continue to invest in private banking and transform investment banking, reducing our overall risk and diversifying our revenue streams. We expect the market environment to remain very challenging and we are cautious with regard to the outlook for the fourth quarter,” he added.

IE