Credit Suisse delivered a fresh blow to confidence in the banking sector yesterday when it revealed $2.85 billion (€1.93 billion) of losses on structured credit positions caused in part by "pricing errors" by some of the Swiss investment bank's traders.

The surprise disclosure comes from a bank that was previously perceived to be among the most resilient to the credit market turmoil that has inflicted multi-billion dollar losses on many of its rivals.

Credit Suisse said the losses would dent first-quarter net income by an estimated $1 billion, although it would still make a profit in the period. However, its 2007 results were also being reviewed. The bank made net income of 8.55 billion Swiss francs (€5.3 billion) last year.

Analysts said they were mystified that Credit Suisse had no inkling of the problems when it released its results last week.

The losses arose from mispriced asset-backed securities in the bank's structured credit trading business, and also reflected adverse market movements in the first quarter. They had come to light thanks to "ongoing control processes", Credit Suisse said, and had triggered an internal review.

The disclosure was made because the bank is about to close a $2 billion 10-year bond issue.

"The final determination of these reductions will depend on further results of our review and continuing market developments," Credit Suisse said in a brief statement. "Our internal review, which has identified mismarkings and pricing errors by a small number of traders in certain positions in our structured credit trading business, is continuing."

Credit Suisse has suspended a handful of traders in connection with the overvaluation of assets that forced the writedown.

The losses will also renew concern about the quality of investment banks' controls. -