After a harsh end to winter, it’s time for spring cleaning at Credit Suisse. The number two Swiss bank had a disastrous first quarter, weighed down by 703 million new provisions for litigation.
The departures concern the most capped people on the executive committee, those who have sat there the longest, in particular the chief financial officer (CFO) David Mathers. He has been in office since 2010 and will remain there until the arrival of his successor, the bank with two sails said on Wednesday.
Apparently highly contested since a lost case in Bermuda and a fine of 500 million dollars, the legal director Romeo Cerutti will be replaced on July 1 by Markus Diethelm, who already held the same position at UBS between 2014 and 2021. Exit also the director General of the Asia-Pacific (Apac) zone Helman Sitohang, who will hand over his functions on June 1 to Edwin Low, already responsible for Credit Suisse in Asia.
These changes do not come as a surprise, however, as the Sunday press aired them over the weekend.
The general management will be reinforced by the arrival of the former boss of Bank of Ireland Francesca McDonagh, who will take over as head of the Europe, Middle East and Africa (Emea) region on October 1. This function was assumed ad interim since the beginning of the year by Francesco De Ferrari, CEO of the division devoted to wealth management.
The surprise potential was also limited for the quarterly figures following the publication of a profit warning last week. The main ingredients are included, namely new provisions for litigation of 703 million francs, a loss related to the participation in Allfunds of 353 million and charges of 206 million for activities in Russia and related to the war in Ukraine.
David Mathers assured that the level of litigation provisions should return to normal following this first quarter. Credit Suisse has multiplied business since March 2021, in particular with the Archegos and Greensill scandals.
Reduced exposure to Russia
Despite these expected negative effects, Credit Suisse delivered an even worse than expected copy, punctuated by a net loss of 273 million francs, stronger than that of 231 million recorded in the first quarter of 2021. established at -428 million (-757 million previously).
“The first quarter of 2022 was marked by volatile market conditions and client risk aversion,” explained chief executive Thomas Gottstein. These unfavorable conditions are linked to the war in Ukraine and the tightening of monetary policies, especially in the United States.
All factors that have caused revenues to plunge by 42% to 4.41 billion, a decline also caused by the strategic reorientation of Credit Suisse, which puts priority on wealth management to the detriment of investment banking.
Analysts are struggling to find anything positive in this flurry of quarterly figures. At UBS, however, we note that net cash inflows of 9.7 billion francs, including 4.6 billion in private banking, are a good surprise.
During the first quarter, the big bank reduced its exposure to Russia. In wealth management, less than 4% of assets belong to Russian clients, some of whom have been hit by Western sanctions, Gottstein said during a conference call.
The group’s boss recalled that 2022 will be a “year of transition” for Credit Suisse, the bank being very busy with its reorientation and suffering from unfavorable market conditions.
After an opening in the green, the title Credit Suisse plunged in the early morning before regaining the hair of the beast. At 11:02 am, the action gleaned 0.1% to 6.61 francs, in an SMI up 0.41%. The registered share remains close to its historic low of 6.18 francs, reached in March 2020 at the start of the Covid-19 pandemic.
This article has been published automatically. Source: ats/awp
