FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at a branch office in Zurich, Switzerland, November 3, 2021. Picture taken November 3, 2021. REUTERS/Arnd WIegmann
February 10, 2022
By Brenna Hughes Neghaiwi
ZURICH (Reuters) -Credit Suisse on Thursday posted a fourth-quarter net loss of 2 billion Swiss francs ($2.2 billion), hurt by provisions to settle its investment bank’s legal costs and a slowdown in business for its trading and wealth management divisions.
The scandal-ridden lender had flagged a loss in January.
For the full year, net income attributable to shareholders tumbled to a 1.572 billion franc loss. That compared to a 2.7 billion franc profit for 2020.
It was a horrendous 2021 for Switzerland’s second-biggest bank, marked by the collapse of $10 billion in supply chain finance funds linked to insolvent British finance firm Greensill and a $5.5 billion trading loss from the implosion of investment fund Archegos.
“2021 was a very challenging year for Credit Suisse. Our reported financial results were negatively impacted by the Archegos matter, the impairment of goodwill relating to the Donaldson, Lufkin & Jenrette (DLJ) acquisition in 2000 and litigation provisions, as we look to proactively resolve legacy issues,” Credit Suisse Chief Executive Thomas Gottstein said in a statement.
“During the last three quarters of the year, we ran the bank with a constrained risk appetite across all divisions as we took decisive actions to strengthen our overall risk and controls foundation and continued our remediation efforts, including on the Supply Chain Finance Funds matter, where our priority is to return cash to investors,” he added.
Last year’s scandals, preceded by an executive spying scandal in 2019, have only been followed by more. It began 2022 with the abrupt departure https://www.reuters.com/business/finance/credit-suisse-faces-money-laundering-charges-trial-bulgarian-cocaine-traffickers-2022-02-07 last month of its chairman brought in just nine months earlier and has become the first major Swiss bank to face a criminal trial https://www.reuters.com/business/finance/credit-suisse-faces-money-laundering-charges-trial-bulgarian-cocaine-traffickers-2022-02-07, charged with allowing an alleged Bulgarian cocaine trafficking gang to launder millions of euros.
Shares in the bank have lost nearly a third of their value since the start of 2020.
Tasked with reforming the bank’s freewheeling corporate culture, Credit Suisse Chairman Axel Lehmann has said he wants to stick with his predecessor’s strategy of focusing on wealth management, noting customer business remained excellent at the time of his appointment in January.
($1 = 0.9242 Swiss francs)
(Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields)
Source: One America News Network
