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Credit Suisse Group on Thursday posted a $2.1 billion net loss for the first quarter as the global effects of the U.S. subprime mortgage crisis continued to spread.

Switzerland’s second-largest bank said it also had net writedowns of $5.3 billion 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 (UBS) to write down $37.4 billion in assets because of bad investments in U.S. mortgage securities.

For the fourth quarter of 2007 Credit Suisse (CS) posted a revised net profit of $536 million.

"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 $3.98 billion in markdowns for buyout loans and mortgage securities, while UBS expects a net loss of $12.36 billion 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 in the first quarter of 2007.

Credit Suisse shares, which have slid 43% in the last 12 months, closed at $52.16 Wednesday, giving the bank a market capitalization of $61.1 billion.

"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," Dougan said.

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

Credit Suisse’s capital position is strong, 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," Dougan said.

Credit Suisse took the bulk of its writedowns - $2.64 billion - for collateralized debt obligations.

But it also marked down $1.67 billion for buyout loans granted but failed to sell to investors and $937 million for mortgage securities.

Credit Suisse trimmed its exposures to the troubled areas during the quarter payday advances. Leveraged loans outstanding fell to $20.6 billion. Subprime CDOs shrank to $695 million from $1.6 billion. 

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