Credit Suisse Group expects to see losses in the first quarter of 2022 as a result of increased legal provisions, slower commercial activity, and the consequences of Russia’s invasion of Ukraine announced the Swiss bank on Wednesday.
The bank is still recovering from billions in losses in 2021, which led to a top-level management shake-up, and it is facing new compliance and risk-related investigations.
Provisions for a variety of previously announced legal matters, many of which date back more than a decade, will climb by over 600m Swiss francs to total around 700m francs, according to Credit Suisse.
Last month, a Bermuda court found that Georgia’s former prime minister and his family were owed “substantially in excess of $500 million” in damages from Credit Suisse’s local life insurance unit owing to fraud.
The impact of Russia’s invasion of Ukraine would have a negative impact on results of 200m francs in negative revenue and reserves for credit losses.
According to Credit Suisse, the first-quarter results will include previously disclosed losses of roughly 350m francs related to a drop in the value of its 8.6% stake in Allfunds Group.
It stated that weaker business activity and a decrease in capital market issuances had harmed the underlying earnings.
These losses would be somewhat offset by a recovery of roughly 170m francs in reserves for claims against the bankrupt investment fund Archegos, as well as real estate gains of around 160m francs, according to the company.
At the bank’s annual general meeting on April 29, Glass Lewis and ISS have advised shareholders to vote against relieving the bank’s board and management from obligation for the 2020 financial year said Reuters.
In earnings due on April 27, it said the group “would expect to report a loss as a consequence of this increase in reserves,” without being more specific.
Credit Suisse shares fell 1.7% to CHF 7.17 after forecasting losses in Q1 2022.
