Switzerland's second-largest bank issues a widespread earnings warning for the first quarter.
Credit Suisse expects earnings in the first quarter of this year will be negatively affected by a significant increase in provisions and reserves, a media release indicated. As a result, it forecasts a loss when publishing first-quarter 2022 results on 27 April.
In the media release, it reported that it had raised its legal provisions by around 600 million Swiss francs ($631 million) related to previously disclosed legal matters stretching back more than a decade. This will bring the total legal provision number to 700 million francs for the quarter.
Smaller Legal Cases
Credit Suisse declined to comment on the specific legal disputes involved when asked by finews.com. It could, however, be the sum of many smaller cases related to the private banking business.
This likely includes a provision connected to the Patrice Lescaudron affair, which finews.com has previously reported on and for which it could be required to pay a fine of up to $500 million.
The bank also said that the impact of the Ukraine war would have a negative 200 million franc impact on revenues and provisions for credit losses.
Decline in Underlying Results, Archegos Offset
It also reported that the first quarter would also contain about 350 million francs in losses resulting from the decline in value of its 8.6 percent holding of Allfunds Group.
Besides that, the bank said that underlying results were affected by a reduced level of capital market issuance and lower business activity. This will be partly offset by a recovery of around 170 million francs in claims from Archegos and 160 million francs in real estate gains.
