Credit Suisse Admits Likely Q2 Loss
Credit Suisse warned of a potential second-quarter loss on Wednesday as market volatility affected its investment bank, the third quarter in a row Switzerland's second-largest bank has issued a profit warning, Brenna Hughes Neghaiwi reported for Reuters.
Photo Insert: The bank has designated 2022 as a "transition" year in which it hopes to move on from costly scandals that resulted in a near-complete overhaul of senior management and a restructuring aimed at reducing risk-taking.
The bank has designated 2022 as a "transition" year in which it hopes to move on from costly scandals that resulted in a near-complete overhaul of senior management and a restructuring aimed at reducing risk-taking, particularly in its investment bank.
The lender said it now plans to move cost savings forward, speeding up measures initiated as part of its reorganization in November, with annual structural cost reductions of 1.0 billion-1.5 billion Swiss francs ($1.03 billion-$1.54 billion) by 2024.
"Given the economic and market environment, we are accelerating our cost initiatives across the group with the aim of maximizing savings from 2023 onwards," it said in a statement, adding further details would be provided at an investor update on June 28.
The bank is considering job reductions as part of the cost cuts, Bloomberg reported on Wednesday. Credit Suisse declined to comment on potential staffing cuts.
Pinning an anticipated group-wide loss on its investment bank, the lender said the Russia-Ukraine war and significant monetary tightening had led to weak customer flows and clients reducing their borrowings so far in the second quarter, particularly in the Asia-Pacific region.
"The impact of these conditions, together with continued low levels of capital markets issuance and the widening in credit spreads, have depressed the financial performance of this division in April and May," Credit Suisse said.