Credit Suisse flags weak 2022, ends a torrid year with $2.2 billion

By Brenna Hughes Neghaiwi

ZURICH (Reuters) -Credit Suisse on Thursday capped a scandal-ridden year with a $2.2 billion quarterly loss and said 2022 earnings would be weighed down by restructuring and compensation costs.

Though Switzerland’s second-biggest bank had flagged a large fourth-quarter loss, it was still steeper than expected with analysts pointing to slides in revenue across most of its business segments in addition to hefty legal costs for its investment bank. In contrast, many of its rivals have posted robust results.

Credit Suisse (SIX:) also flagged a decline in adjusted pretax income for the first quarter. The bank’s shares, which have lost nearly a third of their value since the start of 2020, slid 4% in early trade.

“We see no reason to recommend bets in Credit Suisse securities,” ZKB analyst Michael Kunz said after the results.

Credit Suisse’s horrendous 2021 was marked by the collapse of $10 billion in supply chain finance funds linked to insolvent British finance firm Greensill and a $5.5 billion trading loss from the implosion of investment fund Archegos.

Net income attributable to shareholders for the year tumbled to a 1.6 billion franc loss which compares with a 2.7 billion franc profit in 2020.

Credit Suisse Chief Executive Thomas Gottstein said the bank was actively working on resolving legacy issues, also noting a goodwill impairment charge relating to its acquisition of U.S. investment bank Donaldson, Lufkin & Jenrette (DLJ) in 2000.

“During the last three quarters of the year, we ran the bank with a constrained risk appetite across all divisions as we took decisive actions to strengthen our overall risk and controls foundation and continued our remediation efforts,” he said in a statement.

Last year’s scandals, preceded by an executive spying scandal in 2019, have only been followed by more. It began 2022 with the abrupt departure https://www.reuters.com/business/finance/credit-suisse-faces-money-laundering-charges-trial-bulgarian-cocaine-traffickers-2022-02-07 last month of its chairman brought in just nine months earlier and has become the first major Swiss bank to be tried in a criminal court https://www.reuters.com/business/finance/credit-suisse-faces-money-laundering-charges-trial-bulgarian-cocaine-traffickers-2022-02-07, charged with allowing an alleged Bulgarian cocaine trafficking gang to launder millions of euros.

Credit Suisse has denied wrongdoing in the Bulgarian money laundering case.

Tasked with reforming the bank’s freewheeling corporate culture, Credit Suisse Chairman Axel Lehmann has said he wants to stick with his predecessor’s strategy of focusing on wealth management, noting customer business remained excellent at the time of his appointment in January.

During the final quarter of 2021, Credit Suisse’s…