Credit Suisse posts $2.2B loss to end ‘challenging year’
GENEVA (AP) — Credit Suisse on Thursday reported a fourth-quarter loss of 2 billion Swiss francs ($2.2 billion) as the top-drawer Swiss bank wrapped up “a year of challenges” marked by bad bets on a hedge fund, set asides for legal costs and accounting changes due to its acquisition of a U.S. investment bank over 20 years ago.
The Zurich-based bank, the second largest in Switzerland’s active financial sector after rival UBS, said revenue in the fourth quarter fell 12%, to 4.6 billion francs, compared with a year earlier. It posted a pre-tax loss of 1.6 billion francs stemming in large part to goodwill linked to its acquisition of the Donaldson, Lufkin & Jenrette investment bank in 2000.
Credit Suisse said that loss also stemmed from “major litigation provisions” and continued fallout from a one-time charge of more than 4.4 billion francs announced last spring in connection with the default of U.S. hedge fund Archegos on margin calls.
The bank said “2021 has been a year of challenges.” It cited declining appetite for risk across the company last year, and a new strategy launched in November after a string of setbacks that have dented its reputation.
Shares of CS Group were down about 3.8% in late morning trading on the Six Swiss Exchange at 8.90 francs, though up from earlier lows after the start of trading.
This week, Swiss federal criminal court has been hearing charges that Credit Suisse failed to do enough to stop money laundering linked to drug trafficking by a Bulgarian criminal group, which employed a wrestler who once hauled millions in currency by car to Switzerland.
The case centers on a former bank manager and two members of the criminal ring accused of being involved in wrongdoing reportedly between 2004 and 2008.