Banks ☐-🙂 Credit Suisse closes failed year with massive lo

Credit Suisse closes the year 2021, marked by failures and errors, deep in the red figures. In the final quarter, a billion-dollar valuation adjustment for a US investment bank purchased more than 20 years ago once again put a heavy burden on the result. The year 2022 sees the Grossbank as a & quot; transition year & quot; in the sign of conversion.

The bottom line for the second largest Swiss bank in the past financial year was a net loss of 1.57 billion Swiss francs, as announced by CS on Thursday. With the massive decline in the fourth quarter, the Bank ended two of the four quarters of 2021 with losses. In the first quarter, it had fallen into red numbers due to the collapse of the US hedge fund Archegos.

Im Schlussquartal nahm die CS nun eine Wertberichtigung über 1,6 Milliarden Franken auf den Goodwill der im Jahr 2000 übernommenen US-Investmentbank Donaldson, Lufkin & Jenrette vor. Notwendig geworden sei dies wegen der deutlichen Verkleinerung der Investment Bank im Rahmen des CS-Strategieumbaus, sagte Finanzchef David Mathers an der Bilanzmedienkonferenz.

Breakdown and losses

For Credit Suisse, the year 2021 should definitely go into the company & APOs; s history as an & quot; annus horribilis & quot;. In the first quarter, the Grossbank first had to report the liquidation of the "Greensill" funds with high potential losses for the fund investors. Just weeks later, she suffered billions in losses due to Archegos. In the course of the year, high penalties in connection with loans to Mozambique followed, and most recently the quarantine violations of the subsequent resignation of CS President António Horta-Osório were burdened.

CEO Thomas Gottstein also described 2021 as a "very challenging year" before the media. Overall, Credit Suisse also achieved "solid underlying results"-for example, with good results in Switzerland and Asia, he said. In fact, the market environment for the banking industry was favourable in 2021-competitor UBS, for example, achieved its best annual result in 15 years.

Slowdown in the final quarter

However, in the last quarter of the year, Credit Suisse recorded a marked slowdown in earnings. This was not least due to clearly declining activities of CS customers, especially in the Asian region. The inflows of new money also declined, and in Asia there were even outflows.

At the same time, CS has also significantly restrained risk appetite due to its realignment and significantly reduced its activities in the Investment Bank, emphasized CEO Gottstein. The Grossbank had also been very busy with itself because of its strategic conversion, he admitted.

The employees can also feel the weak business development. Compared to the previous year, the bonus pool for CS employees has been reduced by around a third. The well-paid employees at the level "Managing Directors" and "Directors" were affected above average, said financial director Mathers.

Loads also in 2022

In 2022, CS now sees it as a "year of transition". Restructuring costs as well as higher remuneration costs are likely to affect the results in the new financial year, it said. On the other hand, the positive effects of the new corporate strategy are likely to only come to fruition from 2023.

On the stock market, the number template was very negative on Thursday: CS shares are by far the weakest bluechip titles in the early afternoon, with a decrease of 5.7 percent. The analysts were particularly surprised by the clear decline in earnings. The outlook for the new financial year also made investors less confident due to the deteriorating market environment.

(AWP)