Credit Suisse’s earnings for Q1 2022

Credit Suisse reported a net deficit for the first quarter of 2022 on Wednesday, announcing a management reshuffle as the Swiss lender struggles with litigation costs and the fallout from the war between Russia and Ukraine.

The net loss came to 273 million Swiss francs ($ 283.5 million) for the quarter after it sent a profit warning to markets last week. On Wednesday, the Swiss bank confirmed that Russia-related losses amounted to 206 million Swiss francs. There was also a hit of 155 million Swiss francs related to the Archegos scandal.

In a speech to CNBC’s Geoff Cutmore, Thomas Gottstein, CEO of Credit Suisse, said it was a “tough quarter”.

“We had certain isolated conditions such as the legal provisions that were part of our inheritance work and the handling of some of the old inheritance cases, we obviously also had a bit of a headwind with regard to Russia; so of course we can not be satisfied with a 0, 4 billion – tax losses, “he said.

Legal costs

One of the biggest challenges for Credit Suisse this quarter was litigation costs, which reported operating costs increased 26% from a year ago.

“Our operating costs were higher year-on-year, particularly driven by higher previously reported litigation costs of 703 million Swiss francs for the quarter as we continued our proactive approach to litigation,” Gottstein said in a statement.

Gottstein added to CNBC that “no major bank in the world can say we’re done with lawsuits … we’ve made tremendous progress, as I said, especially with our US cases.”

One of the biggest challenges for Credit Suisse this quarter was litigation costs.

Thi My Lien Nguyen | Bloomberg | Getty Images

Management reorganization

The bank also announced changes in its executive board on Wednesday. David Mathers, who has been CFO since 2010, is leaving the bank. However, he remains in his current position until a replacement is found.

In addition, Helman Sitohang is stepping down as CEO of the Asia-Pacific region, and Romeo Cerutti is stepping down from his group general role as adviser. Francesca McDonagh will take over as CEO of Europe, the Middle East and Africa in October.

Other highlights for the quarter, including:

  • Revenue fell 42% from a year ago to 4.4 billion Swiss francs.
  • Return on tangible equity, a measure of banks’ profitability, was 2.6% – unchanged from a year ago.
  • The CET 1 ratio, a measure of banks’ solvency, was 13.8% against 12.2% a year ago.

– CNBC’s Elliot Smith contributed to this article.

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