Swiss banking giant Credit Suisse said Wednesday that its 2012 first-quarter profit plunged to just 44 million Swiss francs ($48.3 million, 36.6 million euros) from 1.1 billion francs a year ago.
The bank said the poor result was largely the result of an accounting loss on its own debt, and weaker earnings from its investment bank activities.
"Our reported results were adversely impacted by accounting driven fair value losses due to tightening of our own credit spreads," chief executive Brady Dougan said.
He noted that the impact of those losses reached 1.6 billion francs.
Credit Suisse said it had reduced risky assets by 33 percent over the past year to bring its books in line with new international regulations under the Basel III rules which were drawn up in the wake of the financial crisis to make banks reinforce their capital reserves.
Basel III risk-weighted assets now stand at $210 billion, the bank said.
While the net result represented an annualised 96-percent drop in profit, it nonetheless came in above analysts' expectations.
Analysts interviewed by the financial firm AWP had on average forecast net losses of 337 million francs.
"We had a good start to 2012," Dougan concluded.
"We began to see the effects from the measures we announced in mid-2011 to evolve our business model and cost structure and we benefited from an improved market environment."
The investment banking division's pre-tax earnings fell by a third from the same period last year however, while those at Credit Suisse's private banking unit were down by 27 percent.
The asset management division was the only unit to report improved results, reporting income before tax of 250 million francs, an increase of 43 percent.
The results caused little concern among investors. Credit Suisse shares were up 0.25 percent to 23.61 francs in morning trading on the Swiss stock exchange, which was 0.17 percent higher overall.
The bank has not issued a growth forecast for the current year but analysts at Zurich state-owned bank ZKB have predicted that the start of the second quarter will be weaker than the first.
Analysts at the investment group Vontobel warned that Credit Suisse faces a tough climate for rest of the year.
"The investment banking results were clearly stronger than we had expected," Vontobel said in a statement.
"However, we expect the following quarters to be impacted by slowing financial markets and profit before tax to come down in the next three quarters."