Beleaguered Credit Suisse hit by third profit alert as Ukraine war and global economic volatility hinder its recovery
Credit Suisse has slipped out its third profit warning this year as the war in Ukraine and economic volatility pushed back its recovery.
The beleaguered bank, which has been beset by scandals, said it would ramp up its cost-cutting as it expected to make a loss again in the second quarter of this year.
Market conditions so far in 2022 had been ‘challenging’, Credit Suisse said, as Russia’s attack on Ukraine shocked the global economy.
Profit warning: Credit Suisse, which has been beset by scandals, said it would ramp up its cost-cutting as it expected to make a loss again in the second quarter of this year
It has caused central banks to ramp up interest rates to tame inflation, prompting customers to become more cautious, it said.
The Swiss bank said clients were wary about taking on more debt, and were paying loans off instead –notably in the Asia Pacific region.
And while the deal advisory part of its investment banking division was still doing well, it was dragged down by fewer businesses trying to raise money from investors.
The bank said: ‘As we look forward to the second half, the year 2022 will remain one of transition for Credit Suisse.
Given the economic and market environment, we are accelerating our cost initiatives across the group with the aim of maximising savings from 2023 onwards.’
Chief executive Thomas Gottstein has been trying to restore its battered reputation.
Just as it was trying to recover from a spying scandal, where a senior Credit Suisse banker paid private investigators to tail a former employee, it was hit by the collapse of lender Greensill Capital, whose products it had invested in.
Soon after, hedge fund Archegos, which it had lent heavily to, fell apart – causing the bank to haemorrhage billions of pounds.
Then Antonio Horta-Osorio, the former Lloyds Bank boss brought in to help Credit Suisse turn over a new leaf, was ousted after he broke Covid rules to attend the Euro 2020 football final and Wimbledon.