Credit Suisse Group expects to report a first-quarter loss after increasing legal provisions, seeing business activity slow and taking a hit from the fallout of Russia's invasion of Ukraine, the Swiss bank said today.
The bank is still reeling from billions in losses racked up in 2021, which prompted a top management shake-up, and as it faces further probes over compliance and risk failings.
It said provisions relating to a number of previously disclosed legal matters, all of which originated over a decade ago, would rise by around 600 million Swiss francs ($631m) to total approximately 700 million francs.
This came after a Bermuda court last month ruled Georgia's former prime minister and his family were due damages "substantially in excess of $500m" from Credit Suisse's local life insurance arm as a result of fraud.
In earnings due on April 27 it said the group "would expect to report a loss as a consequence of this increase in reserves", without being more specific.
Its exposure to the impact of Russia's invasion of Ukraine would adversely affect results by an aggregate 200 million francs in negative revenue and provisions for credit losses.
Its first-quarter results will also include previously flagged losses of approximately 350 million francs relating to a fall in the value of its 8.6% holding in Allfunds Group, it said.
Underlying results had been adversely impacted by a reduction in capital market issuances and by lower business activity, it added.
These losses would be partially offset by a recovery in provisions of approximately 170 million francs in respect of claims against collapsed investment fund Archegos and by real estate gains of around 160 million francs, it said.
"While we were expecting extraordinary negative impacts of about 600 million francs for the quarter, the total gross impact of 1,250 million francs and net impact of approximately 900 million francs clearly exceeds our assumptions. Another quarterly loss is a clear disappointment," analysts said.
