Credit Suisse ends challenging year with Q4 net loss of $2.9 billion

ZURICH • Credit Suisse yesterday reported a fourth-quarter net loss of two billion Swiss francs (S$2.9 billion), hurt by provisions to settle its investment bank's legal costs and a slowdown in business for its trading and wealth management divisions.

The scandal-ridden lender had flagged a loss last month.

For the full year, net income attributable to shareholders tumbled to a 1.57 billion franc loss.

It was a horrendous year for Switzerland's second-biggest bank, marked by the collapse of US$10 billion (S$13.4 billion) in supply chain finance funds linked to insolvent British finance firm Greensill and a US$5.5 billion trading loss from the implosion of investment fund Archegos. "2021 was a very challenging year for Credit Suisse. Our reported financial results were negatively impacted by the Archegos matter, the impairment of goodwill relating to the Donaldson, Lufkin & Jenrette acquisition in 2000 and litigation provisions, as we look to proactively resolve legacy issues," Credit Suisse chief executive Thomas Gottstein said in a statement.

"During the last three quarters of the year, we ran the bank with a constrained risk appetite across all divisions as we took decisive actions to strengthen our overall risk and controls foundation and continued our remediation efforts, including on the supply chain finance funds matter, where our priority is to return cash to investors."

Last year's scandals, preceded by an executive spying scandal in 2019, have been followed by more.

The bank began this year with the abrupt departure of its chairman brought in just nine months earlier and has become the first major Swiss bank to face a criminal trial, charged with allowing an alleged Bulgarian cocaine trafficking gang to launder millions of euros.

Its shares have lost nearly a third of their value since the start of 2020.

Tasked with reforming the bank's freewheeling corporate culture, Credit Suisse chairman Axel Lehmann has said he wants to stick with his predecessor's strategy of focusing on wealth management, noting customer business remained excellent at the time of his appointment last month.

REUTERS