GENEVA: Swiss banking giant Credit Suisse yesterday posted a net loss of nearly US$3 billion for 2015, hit by hefty litigation provisions and restructuring charges, sending its share price down more than 12 percent.
Switzerland’s second largest bank posted a net loss of 2.9 billion Swiss francs (US$2.9 billion) for the year, compared to a net profit of 1.8 billion francs in 2014.
Observers voiced disappointment, with Vontobel analyst Andreas Venditti lamenting that “overall, this is a weak set of results.”
And the IG analysis firm stressed that “genuine concern is growing about Credit Suisse.”
Investors too showed their unhappiness, sending Credit Suisse’s share price plummeting 12.10 percent to 14.53 Swiss francs each in mid-morning trading as the Swiss stock exchange’s main SMI index dipped only 0.6 percent.
The bank’s new boss Tidjane Thiam announced last October the bank would axe thousands of jobs and raise billions in fresh capital as it strengthens its balance sheet and pivots its focus towards wealth management and Asia.
He said yesterday the bank was accelerating that process and were targeting 500 million francs in cost-savings per year, and would rapidly be letting some 4,000 employees go.
Much of the 2015 loss was due to writing down the value of its assets by 3.8 billion Swiss francs in the final quarter of last year “as a result of the new strategic direction, structure and organization that was announced in October 2015.”
Restructuring charges totaled 355 million francs and 821 million was for litigation.
The bank insisted the “substantial charges … are not reflective of our underlying business performance.”
Nevertheless, even its adjusted core results that do not include such charges saw pre-tax earnings fall to 4.2 billion francs from 6.3 billion in 2014.
But Thiam pointed to improving results in three segments on which it is now focusing, in particular its Asia-Pacific and wealth management units.
