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Bond Market News

Credit Suisse Reports $277mn Loss on Legal Provisions and Ukraine Hit

May 6, 2022

Credit Suisse reported a net loss of CHF 273mn ($277mn) during its Q1 2022 results on net revenues of CHF 4.4bn ($4.5bn), down 42% YoY. Operating expenses jumped 9% higher YoY, driven in particular by higher previously reported litigation expenses of CHF 703mn ($712mn) and a dent of CHF 206mn ($209mn) due to the Russia-Ukraine conflict. Regarding provisions for credit losses however, it recorded a net release of provisions of CHF 110mn ($111.4mn) as compared to a charge of CHF 4.4bn ($4.5bn) during the same period last year. Revenues across Investment Banking, Wealth Management and Asset Management fell 51%, 44% and 10% respectively.  Its gross impaired loans rose by CHF 230mn ($233mn) sequentially in the wealth management unit. Credit Suisse also noted that CHF 10.4bn ($10.5bn) in AUM was “reclassified to assets under custody due to the imposed sanctions in its wealth management division”.  As Reuters notes, this implies that the bank froze the amount from wealthy clients during the quarter due to sanctions. Credit Suisse also added that it expected a Bermuda court case related to a former Georgian Prime Minister to cost about $600mn. The bank’s CET1 ratio stood at 13.8%, up 160bp YoY.

Credit Suisse’s dollar bonds were weaker with its 5.25% Perp down over 0.3 points to 87.6, yielding 8.48%

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