(AOF) – Credit Suisse has warned that its results will be even worse than expected in the fourth quarter. Its accounts will be “negatively impacted by provisions for litigation of approximately 500 million Swiss francs, partially offset by gains on property sales of 225 million Swiss francs”. These old disputes mainly concern its investment bank.
In early November, the bank had warned that it would record an impairment charge of 1.6 billion Swiss francs at its investment bank which will lead to the accounts in the red in the fourth quarter. The loss will therefore be even greater than expected.
Also in early November, the Swiss bank said it was facing a slowdown in investment banking and wealth management.
“This reflects the usual seasonal slowdown but, in addition, business activity reflects the return to more normal business conditions after the exceptional environment that has prevailed for most of 2020 and 2021,” Credit Suisse explained today.
“Combined with the reduction in our overall risk appetite, including our decision to largely exit the prime services business, this resulted in a loss in the fourth quarter of 2021 for the investment banking division (before goodwill impairment )” she added.
The establishment also unveiled good news: its hard capital ratio would be higher than its target of 14% at the end of 2021.
Credit Suisse Group announced last week that the Board of Directors had appointed Axel P. Lehmann as the bank’s new chairman, effective immediately. He succeeds António Horta-Osório, who resigned following an investigation commissioned by the Council. The latter, who had held this position since only the end of April, notably broke quarantine rules linked to the pandemic.
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Many challenges for European banks
The European retail banking model is particularly challenged by the rise of digital technology. Some are withdrawing from this activity, as is the case with HSBC. Added to this is an increase in risks. Thus, according to the ECB, the strong activity of the big banks on the market for leveraged transactions and the markets for derivative products linked to equities expose them to excessive risk-taking.
As for French banks, since the health crisis, they are increasingly exposed to cyber risk following the need to switch massively and quickly from financial activities to teleworking and the provision of remote services.