Credit Suisse posts $1.4B pre-tax loss as woes go on in 4Q
Feb 9, 2023, 2:44 AM | Updated: 2:46 am
GENEVA (AP) — Credit Suisse on Thursday reported a pre-tax loss of more than 1.3 billion Swiss francs (about $1.4 billion) in the fourth quarter of last year, as its new managers vie to right the top-drawer Swiss bank that has faced a string of setbacks in recent years.
The bank also announced the $175 million purchase of the investment banking business of U.S.-based M. Klein & Co. and plans to roll those operations into the revived CS First Boston investment bank.
The Zurich-based company, Switzerland’s No. 2 bank after UBS, said net revenue sank 20% compared with a year ago, coming in at 3 billion francs for the fourth quarter. The pre-tax loss was nearly 1.32 billion francs, compared with 1.67 billion in the same period a year earlier.
Credit Suisse saw its investment bank business shrink and its Swiss bank and wealth management operations increase as a share of revenue. The company says it expects losses in both the investment bank and wealth management units for the first quarter of this year, partly due to a drop in assets under management and lower deposits since announcing a broad restructuring in October.
The bank’s performance last year overall “was mainly driven by significantly lower” investment banking revenue, pointing to an “industry-wide slowdown in capital markets” with major indices all falling in 2022, it said in a statement.
In October, Credit Suisse unveiled a “radical strategy” to revamp itself through measures including cost cuts, staff reductions, steps to lower risk and a cash infusion through a share purchase from the Saudi National Bank.
Credit Suisse has run into multiple troubles in recent years, including bad bets on hedge funds and a spying scandal involving UBS. A Swiss court fined the bank more than $2 million in September for failing to prevent money laundering linked to a Bulgarian criminal gang more than 15 years ago.
For the year, revenue plunged 34% to 14.92 billion francs, and the pre-tax loss came in at 3.26 billion francs, compared with a pre-tax loss of 600 million francs in 2021.
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