- The struggling Swiss lender released its annual report, which was scheduled for release last Thursday but was ultimately delayed by an appeal from the U.S. Securities and Exchange Commission.
- After discussions with the US regulator were completed, Credit Suisse confirmed its 2022 results announced on February 9, which showed a net loss of 7.3 billion Swiss francs ($8 billion) for the full year.
- Shares of the bank fell another 5% to a new all-time low in early trading in Europe on Tuesday.
The Credit Suisse Group logo in Davos, Switzerland, Monday, January 16, 2023.
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Credit Suisse said on Tuesday that its net asset outflows had declined but “not yet reversed” and announced that “significant weaknesses” had been identified in its financial reporting processes for 2022 and 2021.
The struggling Swiss lender released the annual report due last Thursday, which was delayed by a late call from the US Securities and Exchange Commission (SEC).
This conversation related to a “technical assessment of previously disclosed revisions to the consolidated cash flow statements for the years ended December 31, 2020 and 2019, and related controls.”
In Tuesday’s annual report, Credit Suisse revealed that it had identified “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022.
These issues were related to “the inability to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatement” and various internal control and communication deficiencies.
Despite this, the bank said it was able to confirm that its financial statements over the years in question “present fairly well, in all material respects, (its) consolidated financial position”.
Credit Suisse confirmed its 2022 results announced on Feb. 9, which showed a net loss of 7.3 billion Swiss francs ($8 billion) for the full year.
Shares of the bank fell another 5% to a new all-time low in early trading in Europe on Tuesday.
At the end of 2022, the bank disclosed that it was seeing “significantly higher cash deposit withdrawals, non-renewal of maturing term deposits and net asset outflows at levels that significantly exceeded the rates incurred at third quarter of 2022″.
Credit Suisse recorded client withdrawals of more than 110 billion Swiss francs in the fourth quarter as a series of scandals, legacy risks and non-compliance continued to plague it.
“These outflows have stabilized at much lower levels but have not yet reversed as of the date of this report. These outflows have led us to partially utilize liquidity buffers at Group and legal entity level, and we fell below certain regulatory requirements at the legal entity level.”
Credit Suisse acknowledged that these circumstances have “exacerbated and may continue to exacerbate” liquidity risks. The reduction in assets under management is expected to lead to lower net interest income and recurring fees and expenses, which in turn will affect the bank’s capitalization targets.
“A failure to reverse these outflows and restore our assets under management and deposits could have a material adverse effect on our results of operations and financial condition,” the report said.
Credit Suisse reiterated that it had taken “decisive action” on legacy issues as part of its ongoing massive strategic overhaul, which is expected to result in “substantial” further financial loss in 2023.
The bank’s board collectively waived a bonus for the first time in more than 15 years, the annual report confirmed, while winning a combined fixed compensation of 32.2 million Swiss francs.