Credit Suisse issues quarterly loss warning following losses in previous two quarters

Swiss global investment bank Credit Suisse has issued a warning that it is likely to post a loss for Q2 2022, following losses made in the two previous quarters.

In Q1 2022, Credit Suisse reported net revenues of CHF 4.4bn (£3.58bn) and a pre-tax loss of CHF 428mn (£349mn). The Swiss lender said it faced more volatile markets, weak customer flows and continued debt reduction by clients, especially in China and the Asia-Pacific region.

Credit Suisse also said a quarterly loss is expected at its investment bank, where performance had been weaker in April and May. In an effort to reduce risk and shift focus to wealth management, the size of this division is set to be reduced.

The Swiss bank also said it plans to keep a common equity Tier 1 ratio of around 13.5% in the short term and is targeting a ratio higher than 14% for 2024.

It was reported by the Wall Street Journal that legal costs to settle past scandals and a weakened financial performance as the bank executes a plan to dial back on risk following the collapses of Greensill Capital and Archegos Capital Management—which resulted in a financial hit of several billions of dollars—have likely eaten away some of the bank’s capital.