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Bond Market News
Credit Suisse Warns of Q1 Loss on Legal Provisions
April 21, 2022
Credit Suisse Group expects to post a Q1 2022 loss on rising legal provisions, hit from the Russia-Ukraine war, and the slowdown in capital market deals/business activity. The results are due on April 27. In March, a Bermuda court ruled in favor of Georgia’s former prime minister and his family, who are now due to receive damages “substantially in excess of $500mn” from Credit Suisse’s local life insurance arm. This led to an increase in legal provisions by CHF 600-700mn ($631-$736mn). The ongoing Russia-Ukraine war will impact results by a total CHF200mn ($210mn) across revenues dropping and increased provisions for credit losses. Its results will also include losses of CHF350mn ($368mn) related to a fall in the value of its 8.6% holding in Allfunds Group. Slowdown in capital market issuances and lower business activity also adversely impacted Q1, akin to Wall Street peers. These losses would be partially offset by a recovery in provisions of around CHF170mn ($179mn) of claims against troubled investment fund Archegos and by real estate gains of around CHF160mn ($168mn), it said. At the AGM to be held on April 29, investor advisers Glass Lewis and ISS have recommended shareholders to vote against discharging the bank’s board and management from liability for the financial year 2020.
Credit Suisse’s dollar bonds were trading lower, its 7.27% Perp down over 0.22 points to 100.13 yielding 7.20%.
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