© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at its headquarters at the Paradeplatz square in Zurich, Switzerland October 1, 2019. REUTERS/Arnd Wiegmann
By Brenna Hughes Neghaiwi
ZURICH (Reuters) – Credit Suisse (SIX:) posted on Wednesday a 273 million Swiss franc ($283.6 million) first-quarter loss, prolonging the embattled lender’s financial troubles after a slew of scandals.
The bank also announced another set of top management departures.
The first-quarter loss, on the back of fresh legal charges and a near halving of net revenues, heaps further pressure on Switzerland’s second-biggest bank, which is still reeling from billions in losses racked up in 2021 and as shareholder pushback grows over what has been described as a freewheeling culture.
The loss, which Credit Suisse had warned about last week, was steeper than the 252 million franc loss it posted a year before and marked its fourth quarter in the red out of the last six.
“The first quarter of 2022 has been marked by volatile market conditions and client risk aversion. These conditions, together with the impact from our reduction in risk appetite in 2021 as we took decisive actions to strengthen our overall risk and controls foundation, had an adverse impact on our net revenues,” Chief Executive Thomas Gottstein said in a statement.
Credit Suisse also announced the departure of three of its longest-serving executives, saying Chief Financial Officer David Mathers would depart as soon as a suitable successor was found, while Group General Counsel Romeo Cerutti would retire after more than 10 years, to be replaced by former UBS General Counsel Markus Diethelm.
It named Edwin Low head of its Asia-Pacific business, confirming sources’ statements from Wednesday that Low would be replacing veteran banker Helman Sitohang.
The bank has been trying to reform its risk management culture and turn the page on a series of scandals, which have prompted multiple rounds of top management shake-ups, abrupt departures, and internal and external probes.
In recent months, it has also become a defendant in the first criminal trial against a major bank in Switzerland, while a Bermuda court in March ruled a local arm of the lender owed billionaire Bidzina Ivanishvili “substantially in excess of $500 million” over a long-running fraud committed by a former adviser.
On Wednesday, it said it had bulked up legal provisions by 703 million francs during the quarter, dragging it down into a loss.
Investors and analysts have been looking for signs of how the series of scandals is impacting the bank’s client relationships, seen as the bedrock of Credit Suisse’s core wealthy and ultra-wealthy segments of the wealth management business.
On Wednesday, it said its core wealth management business, which it has been trying to shore up, had seen 4.8 billion Swiss francs in fresh client inflows during the first three months of the year, driven mainly by ultra-wealthy customers in Switzerland as well as its Asian and external asset managers businesses.
Revenues in the business, meanwhile, fell 44% as it pointed to a slowdown in its wealth and investment banking ‘Global Trading Solutions’ tie-up – an area the bank is targeting for growth under its new strategy – as well as lower brokerage and product fees.
The flagging results demonstrated a widening gulf between Credit Suisse and its larger rival UBS, which on Tuesday posted its best first-quarter net profit in 15 years.
($1 = 0.9627 Swiss francs)
(This story corrects grammar in headline)
Be the first to comment