Credit Suisse reports fourth quarter loss

written by the Twitter blogger @fintwitnow

Credit Suisse published a fourth-quarter net loss of 2 billion Swiss francs ($2.2 billion), weighed down by provisions to settle its investment banking legal costs and slowing business in its trading and wealth management divisions.

The Swiss bank, which has recently been hit by several scandals, had advanced in January its forecast that it would record a loss.

In 2021, net income attributable to shareholders fell to a loss of 1.572 billion francs vs. a profit of 2.7 billion francs in 2020.

It was an 'annus horribilis' for Switzerland's second-largest bank, marked by the collapse of $10 billion in supply chain finance funds linked to insolvent British financial firm Greensill and a $5.5 billion accounting loss from the implosion of investment fund Archegos.

"2021 was a very difficult year for Credit Suisse. Our accounting financial results were negatively impacted by the Archegos matter, the goodwill impairment related to the acquisition of Donaldson, Lufkin & Jenrette (DLJ) in 2000 and litigation provisions as we seek to proactively resolve legacy issues," Credit Suisse CEO Thomas Gottstein said in a statement.

"During the last three quarters of the year we ran the bank with a restrained risk appetite in all divisions as we took decisive action to strengthen our overall risk and controls base and continued our remediation efforts, including the supply chain finance fund issue, where our priority is to return cash to investors," Gottstein added.

Last year's scandals, preceded by an executive spying case in 2019, have only escalated. It began 2022 with the abrupt departure last month of its inducted chairman just nine months earlier, and has continued with Credit Suisse becoming the first major Swiss bank to face a criminal trial, accused of allowing an alleged Bulgarian cocaine trafficking gang to launder millions of euros - Reuters reports.

The bank's shares have lost almost a third of their value since the beginning of 2020.

Tasked with reforming the bank's corporate culture, Credit Suisse Chairman Axel Lehmann has said he wants to maintain his predecessor's strategy of focusing on wealth management for wealthier clients, noting that the business was still in good shape at the time of his appointment in January.

written by the Twitter blogger @fintwitnow