In what is becoming a habit for Credit Suisse, the Swiss banking giant warned investors on Wednesday that it was likely to lose money in its latest quarter. This would be Credit Suisse’s third loss-making quarter in a row, each of which was preceded by a warning that the results would be worse than the bank had initially expected, as it reels from a series of crises and upheavals.
Credit Suisse’s stock fell more 5 percent, near an all-time low. It has lost about 30 percent of its value this year.
In its latest warning, Credit Suisse cited market volatility and reduced client activity resulting from the war in Ukraine, central banks raising interest rates to combat high inflation and the end of pandemic rescue programs. The bank said it would accelerate its cost-cutting plans, which previously targeted up to $1.5 billion in annual savings by 2024. Now, it aims to “maximize savings from 2023 onwards,” it said in a statement, without being more specific.
Bloomberg reported that the bank, which has about 51,000 employees, was considering a round of job cuts as part of the plan. A Credit Suisse spokeswoman declined to comment on the report and referred to the bank’s statement.
The Swiss bank has been unsettled by repeated setbacks. Last year, the bank reckoned with billion-dollar entanglements with Greensill Capital, a bankrupt British lender, and Archegos, a collapsed hedge fund. The bank was hit with extra legal costs last quarter, related in part to a multimillion-dollar dispute with the former prime minister of Georgia that it lost in court in Bermuda. The bank has also frozen more than $10 billion in assets held by clients subject to sanctions over Russia’s invasion of Ukraine.
Credit Suisse’s current chief executive, Thomas Gottstein, who took over in early 2020 after the previous chief, Tidjane Thiam, was forced out after an employee surveillance scandal. In January, the bank’s chairman, António Horta-Osório, stepped down, less than a year after taking the position, after an investigation into whether his travels broke pandemic rules. In April, Credit Suisse announced the departure of its finance chief, head of Asia and general counsel.
Bosses at the biggest Wall Street banks, which compete with Credit Suisse around the world, warned this month that the economic outlook was deteriorating. That could add to the pressure on Credit Suisse, as it tries to turn around its business amid the internal turmoil.
After its repeated profit warnings, some analysts have been losing faith in the bank. Eoin Mullany of Berenberg, who downgraded his forecast on Credit Suisse last month, wrote in an accompanying note that “until Credit Suisse can show some stability in the franchise and hence revenues, which appears to be some way off, it is hard to be positive.”