ZURICH, Jan 25 (Reuters) – Credit Suisse warned on Tuesday it is likely to post a net loss in the fourth quarter due to litigation provisions and a slowdown in its trading and wealth management businesses.
“Results reported for the fourth quarter will be negatively impacted by litigation provisions of approximately 500 million Swiss francs [482,4 millions d’euros], partially offset by capital gains on real estate sales of 225 million,” the Swiss bank said in a statement.
She specified that these provisions were linked to the settlement of disputes concerning the activity of her investment bank.
Combined with other charges, these provisions should lead to near zero pre-tax income for the last quarter of 2021.
Credit Suisse is trying to turn the page on a series of financial scandals that have exposed failing risk management, an effort undermined by the sudden departure this month of its chairman Antonio Horta-Osorio less than a year. after taking office.
The second Swiss banking group announced in November a reorganization centered on a reduction of its investment banking activity to favor the development of its base of wealthy clients.
He then said he expected to pass a depreciation of 1.6 billion Swiss francs (1.54 billion euros) for goodwill related to the remaining activities of his investment bank.
Tuesday, Credit Suisse also warned that the investment bank would be penalized by a slowdown in income from transactions.
“Combined with the reduction in our overall risk appetite, including our decision to largely exit our brokerage services business, this resulted in a loss for the fourth quarter of 2021 in the investment banking division (before impairment of goodwill),” Credit Suisse warned.
The wealth management activity, on which the bank wants to focus its efforts, will also be affected by the slowdown in transactions, even if it will benefit from inflows into the asset management activity.
Credit Suisse shares are down 0.8% in pre-market trading according to Julius Baer.
(Report Brenna Hughes Neghaiwi and Paul Arnold, Blandine Hénault for the French version, edited by Bertrand Boucey)