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Credit Suisse unveiled through the earnings report that there will be a significant change in its management moving forward.
Swiss multinational banking giant Credit Suisse Group AG (SWX: CSGN) has published its first quarter (Q1) 2022 earnings report with its performance showcasing its struggles within that time frame. Credit Suisse reported a net loss of 273 million Swiss francs ($283.5 million) as it spent so much on litigation costs that weighed down its overall performance.
Besides this, the company said losses that it incurred by virtue of the Russian war with Ukraine came in at 206 million Swiss francs. Credit Suisse also pegged 155 million Swiss francs as the losses it recorded in connection to the Archegos scandal. The company has been facing a lot of scandals lately, the latest of which is related to the bank’s connections to criminal strings.
“We had certain one-offs like the legal provisions which was part of our legacy work and dealing with some of the old legacy cases, we obviously also had some headwinds with respect to Russia; so obviously we cannot be happy with a 0.4 billion pre-tax loss,” said Thomas Gottstein, chief executive officer of Credit Suisse. Gottstein described the Q1 as a very “tough quarter.”
Per the figures posted by the firm, total revenue came in at 4.4 billion Swiss Francs, down 42% from the year-ago period. Credit Suisse said the return on tangible equity, a measure of bank profitability, was 2.6%, a figure that was unchanged from a year ago, and the CET 1 ratio, a measure of bank solvency, was 13.8% as against 12.2% a year ago.
Additionally, the bank saw a 44% decline in its Wealth Management revenues while Asset Management revenue plunged by more than 10% when compared to the same period a year ago.
Weighed down by litigation costs as mentioned, Credit Suisse’s operating expense shot up by over 26% year-on-year.
“Our operating expenses were higher year on year, driven in particular by higher previously reported litigation expenses of 703 million Swiss francs for the quarter as we continued our proactive approach to resolving litigation matters,” Gottstein said in a statement.
Credit Suisse Earnings Report Details Management Reshuffle
As a company, Credit Suisse unveiled through the earnings report that there will be a significant change in its management moving forward. First, long-term Chief Financial Officer, David Mathers will be making his exit from the bank, even though there are plans for him to continue in the role until a suitable replacement is found.
Mathers is not the only top executive leaving as Helman Sitohang will be stepping down as Chief Executive Officer of the Asia-Pacific region while Romeo Cerutti is retiring from his group general counsel role in the company. To complete the massive reshuffling, come October, Francesca McDonagh is taking over as CEO of Europe, the Middle East, and Africa.
Following the Q1 performance earnings from Credit Suisse, the company’s shares were trading at CHF6.58, down 0.36% in the past 24 hours.