Crisis-ridden Switzerland's second-largest bank, Credit Suisse (CSGN.CH) has released its annual report with a delay caused by a subpoena from the Securities and Exchange Commission (SEC). The bank announced today that it has identified "material weaknesses" in its financial reporting processes for 2022 and 2021. It also trumpeted that liquidity risks may be intensifying.
- Credit expects a progressive downfall in AUM (assets under management) which will reduce net interest income, fees and commissions, which in turn may affect the capital position. The bank's management waived its annual bonus for the first time in nearly 15 years. Credit Default Swaps (CDS) for Credit Suisses rises today at 5,22% level (all-time high), signalling speculators play for possible default;
- The conversation with the SEC concerned the assessment of adjustments to cash flow statements for the years ended December 31, 2020 and 2019 and related controls. The bank told the markets that the 'weaknesses' identified relate to internal control over financial reporting for 2021 and 2022, i.e., and risk management, internal control and communications;
- Despite the problems identified, the bank conveyed that it confirmed the accuracy of the financial statements themselves for the years in question. It conveyed that its net asset outflows have decreased, but have not yet reversed the trend; the outflows have resulted in the partial use of liquidity buffers and, according to the bank's comment, 'falling below certain regulatory requirements;
- The bank's full-year net loss in 2022 was 7.3 billion Swiss francs (about $8 billion). Credit Suisse recorded customer withdrawals of more than CHF 110 billion in the fourth quarter due to the precarious situation and a string of scandals. Their scale exceeded the already disastrous Q3 2022 and the share discount deepened. In recent days, the stock price has been hit by systemic risks in the US banking sector.
Credit Suisste (CSGN.CH), W1 interval. After the 2008 crash, the stock price never recovered to near historic highs. Currently at historic lows, the bank is trading at an 83% discount to its book value. Source: xStation5
