Credit Suisse issues another earnings warning

In what is becoming a habit for Credit Suisse, the Swiss banking giant informed investors Wednesday that it was likely to lose money in its final quarter. It would be Credit Suisse’s third consecutive loss-making quarter, each preceded by a warning that results would be worse than the bank had originally expected as it reeled from a series of crises and upheavals. .

Credit Suisse shares fell more than 5%, near an all-time low. It has lost about 30% of its value this year.

In its latest warning, Credit Suisse cited market volatility and reduced client activity resulting from the war in Ukraine, with central banks raising interest rates to combat high inflation and the end of programs rescue in the event of a pandemic. The bank said it would accelerate its cost-cutting plans, which previously targeted up to $1.5 billion in annual savings by 2024. Now it aims to “maximize savings from 2023” , she said in a statement, without being more specific.

Bloomberg reported that the bank, which has about 51,000 employees, was considering a series of job cuts as part of the plan. A Credit Suisse spokeswoman declined to comment on the report and referred to the bank’s statement.

The Swiss bank has been rocked by repeated setbacks. Last year, the bank relied on billion-dollar entanglements with Greensill Capital, a bankrupt British lender, and Archegos, a bankrupt hedge fund. The bank was hit with additional legal costs last quarter, related in part to a multimillion-dollar dispute with the former Georgia prime minister that it lost in a Bermuda court. The bank also froze more than $10 billion in assets held by clients subject to sanctions following the Russian invasion of Ukraine.

Current Credit Suisse chief executive Thomas Gottstein, who took office in early 2020 after former chief executive Tidjane Thiam was forced out after an employee surveillance scandal. In January, the bank’s president, António Horta-Osório, resigned, less than a year after taking office, after an investigation into whether his travels breached pandemic rules. In April, Credit Suisse announcement the departure of its Chief Financial Officer, Asia Director and Legal Director.

The bosses of the biggest Wall Street banks, which compete with Credit Suisse around the world, warned this month that the economic outlook was deteriorating. That could add pressure on Credit Suisse as it tries to turn around its business amid internal turmoil.

After its repeated earnings warnings, some analysts lost faith in the bank. Eoin Mullany of Berenberg, who lowered his forecast for Credit Suisse last month, wrote in an accompanying note that “until Credit Suisse can show some stability in the franchise and therefore income, which seems to be way off, it’s hard to be positive.”