Scandals and high losses led to an unprecedented number of withdrawals of client deposits. For 2021, the bank had a loss of 1.65 billion francs, so it has a second year in the red.
In the fourth quarter, the bank had a loss of 1.39 billion francs, down from 2.08 billion CHF year-on-year. At the end of last year, however, the pace of the outflow of clients, who withdrew over 110 billion francs, accelerated.
The wealth management and investment banking divisions are likely to post losses in this year’s first quarter as well, the bank said.
Bankruptcies, scandals
Credit Suisse’s results “are even worse than we feared and the level of outflows is quite staggering,” analyst Thomas Hallett of Keefe, Bruyette & Woods said in a note to clients. “With heavy losses expected to continue into 2023, we expect another wave of downgrades and see no reason to own this stock,” he added.
Credit Suisse used to be a symbol of Swiss reliability, but its reputation has been damaged by a series of scandals. The bank suffered huge losses due to the bankruptcy of the financial company Greensill, which backed Liberty Steel, and the collapse of the American fund Archegos.
Other scandals included an unprecedented domestic prosecution of money laundering for a criminal gang.
The bank’s shares on the stock exchange in Zurich were depreciating by more than six percent in the morning and held just above three francs a piece. A year ago they cost almost nine francs, five years ago about 16 francs.
Credit Suisse is trying to reassure investors, it bought back billions in debt
Economic
