Credit Suisse investment bank warns of trading slowdown
Swiss lender says fourth-quarter results will be weighed down by a SFr500m litigation provision
Credit Suisse has warned that its investment bank will report a loss for the fourth quarter as trading revenues slowed, marking the latest blow to a lender reeling from the exit of António Horta-Osório earlier this month.
The final quarter of 2021 saw a slowdown in “transaction based revenues” at its investment bank, Credit Suisse said on Tuesday, adding that this partly reflected “a reversion to more normal trading conditions”.
Alongside the slowdown in revenues, the lender also said it would take a SFr500m provision in the fourth quarter to cover litigation settlements, mostly tied to its investment banking business.
The charge will affect fourth-quarter results, the bank said, but did not give further details of the litigation. It added that the charge would be partly offset by gains of SFr225m from real estate sales.
The warning comes a week after Horta-Osório, who was installed as chair last year to overhaul the bank’s culture following a series of crises, resigned after repeated breaches of coronavirus quarantine rules.
In its trading update on Tuesday, the bank also said that its wealth management division, where it is racing to catch up with Swiss rival UBS, had experienced a “significant slowdown in transaction activity” in the Asia-Pacific region.
Credit Suisse had already announced that it would take a SFr1.6bn goodwill impairment in the quarter. Before that, the bank as a whole is expected to break-even for the period.