Credit Suisse reported a net loss for the first quarter of 2022 on Wednesday and announced a management reshuffle, as the Swiss lender grapples with legal costs and the fallout from the Russia-Ukraine war.
The net loss was 273 million Swiss francs ($283.5 million) for the quarter, after a profit warning was sent to 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 155 million Swiss francs linked to the Archegos scandal.
Speaking to CNBC’s Geoff Cutmore, Thomas Gottstein, managing director of Credit Suisse, said it was a “difficult quarter”.
“We had some ad hoc situations like the legal provisions that were part of our inheritance work and dealing with some of the old inheritance cases, we obviously also had some headwinds with regard to Russia so obviously, we can’t settle for a 0.4 billion pre-tax loss,” he said.
One of the biggest challenges for Credit Suisse this quarter has been legal costs, reporting that operating expenses rose 26% from a year ago.
“Our operating expenses increased year-over-year, in particular due to the increase in previously reported litigation costs of 703 million Swiss francs for the quarter, as we continue our proactive approach to resolve the litigation,” Gottstein said in a statement.
Gottstein added to CNBC that “no major bank in the world can say we’re done with the court cases…we’ve made tremendous progress, as I said, especially with our US cases.” .
One of Credit Suisse’s main challenges this quarter has been legal costs.
Thi Mon Lien Nguyen | Bloomberg | Getty Images
The bank also announced changes to its board on Wednesday. David Mathers, chief financial officer since 2010, is leaving the bank. However, he will remain in his current position until a replacement is found.
Additionally, Helman Sitohang is stepping down as CEO of Asia Pacific and Romeo Cerutti is stepping down from his role as Group General Counsel. Francesca McDonagh takes over as CEO for Europe, Middle East and Africa in October.
Other highlights of the quarter include:
- Revenue fell 42% from a year ago to 4.4 billion Swiss francs.
- Return on tangible equity, a measure of bank profitability, was 2.6%, unchanged from a year ago.
- The CET 1 ratio, a measure of bank solvency, was 13.8% compared to 12.2% a year ago.
—CNBC’s Elliot Smith contributed to this article.