Credit Suisse posts US$1.4B pre-tax loss as woes go on in 4Q

GENEVA –

Credit Suisse on Thursday reported a pre-tax lack of greater than 1.3 billion Swiss francs (about US$1.4 billion) within the fourth quarter of final yr, as its new managers vie to proper the top-drawer Swiss financial institution that has confronted a string of setbacks lately.

The financial institution additionally introduced the $175 million buy of the funding banking business of U.S.-based M. Klein & Co. and plans to roll these operations into the revived CS First Boston funding financial institution.

The Zurich-based firm, Switzerland’s No. 2 financial institution after UBS, stated internet income sank 20% in contrast with a yr in the past, coming in at 3 billion francs for the fourth quarter. The pre-tax loss was almost 1.32 billion francs, in contrast with 1.67 billion in the identical interval a yr earlier.

Credit Suisse noticed its funding financial institution business shrink and its Swiss financial institution and wealth administration operations improve as a share of income. The firm says it expects losses in each the funding financial institution and wealth administration items for the primary quarter of this yr, partly because of a drop in belongings below administration and decrease deposits since saying a broad restructuring in October.

The financial institution’s efficiency final yr total “was mainly driven by significantly lower” funding banking income, pointing to an “industry-wide slowdown in capital markets” with main indices all falling in 2022, it stated in a press release.

In October, Credit Suisse unveiled a “radical strategy” to revamp itself by means of measures together with value cuts, workers reductions, steps to decrease danger and a money infusion by means of a share buy from the Saudi National Bank.

Credit Suisse has run into a number of troubles lately, together with unhealthy bets on hedge funds and a spying scandal involving UBS. A Swiss court docket fined the financial institution greater than $2 million in September for failing to stop cash laundering linked to a Bulgarian felony gang greater than 15 years in the past.

For the yr, income plunged 34% to 14.92 billion francs, and the pre-tax loss got here in at 3.26 billion francs, in contrast with a pre-tax lack of 600 million francs in 2021.