Credit Suisse on Wednesday reported a net loss for the first quarter of 2022 and announced a reorganization of management, as the Swiss lender is struggling with legal costs and the fallout from the war between Russia and Ukraine.
The net loss came to 273 million Swiss francs (283.5 million dollars) for the quarter, after sending out a profit warning to the markets last week. On Wednesday, the Swiss bank confirmed that Russia-related losses amounted to 206 million Swiss francs. There was also a hit of 1[ads1]55 million Swiss francs related to the Archegos scandal.
In a conversation with CNBC’s Geoff Cutmore, Thomas Gottstein, CEO of Credit Suisse, said it was a “tough quarter”.
“We had certain one-offs such as the legal provisions that were part of our inheritance work and handling of some of the old inheritance cases, we obviously also had a bit of a headwind with regard to Russia; so obviously we can not be happy with a 0.4 billion before – Tax loss , he said.
One of the biggest challenges for Credit Suisse this quarter was litigation costs, which reported operating costs increase by 26% from a year ago.
“Our operating costs were higher year on year, particularly driven by higher previously reported legal costs of 703 million Swiss francs for the quarter, as we continued our proactive approach to litigation,” Gottstein said in a statement.
Gottstein added to CNBC that “no major bank in the world can say we are done with legal cases … we have made tremendous progress, as I said, especially with our US cases.”
One of the biggest challenges for Credit Suisse this quarter was legal costs.
Thi My Lien Nguyen | Bloomberg | Getty pictures
Change of management
The bank also announced changes to the executive board on Wednesday. David Mathers, who has been CFO since 2010, is leaving the bank. However, he will remain in his current position until a replacement is found.
In addition, Helman Sitohang resigns as CEO of the Asia-Pacific region, and Romeo Cerutti resigns from his role as general adviser to the group. Francesca McDonagh will take over as CEO of Europe, the Middle East and Africa in October.
Other highlights for the quarter, including:
- Revenue fell 42% from a year ago to 4.4 billion Swiss francs.
- The return on tangible equity, a measure of the bank’s profitability, was 2.6% – unchanged from one year ago.
- The CET 1 ratio, a measure of the banks’ solvency, was 13.8% compared with 12.2% a year ago.
– CNBC’s Elliot Smith contributed to this article.