Credit Suisse Group AG yesterday said it was likely to make a net loss in the fourth quarter, as the scandal-hit lender flagged fresh legal costs and said business in its trading and wealth management divisions had slowed.
“Profit for the fourth quarter 2021 will be negatively impacted by litigation provisions of approximately 500 million Swiss francs [US$545 million], partly offset by gains on real estate sales of 225 million Swiss francs,” the embattled lender said in a statement, adding the legal hits were primarily related to settlement of legacy cases from its investment banking business.
Combined with other charges, it said this was expected to result in a reported pre-tax income or loss of “approximately breakeven” for the fourth quarter.
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Credit Suisse has been trying to turn the page on a slew of negative headlines and reform its risk management culture, an effort set back by the abrupt departure of the chairman brought in just nine months earlier to lead that transformation.
Switzerland’s second-largest lender in November announced plans to rein in its investment bankers and plow money into looking after the fortunes of the world’s rich, as it tries to curb a freewheeling culture that has cost it billions in a string of scandals.
It said at the time it expected to take an impairment of 1.6 billion Swiss francs in the fourth quarter on remaining investment banking-related goodwill on its books.
Credit Suisse yesterday said that its investment bank would also be affected by a slowdown in transaction-based revenue.
“Combined with the reduction in our overall risk appetite, including our decision to substantially exit our prime services business, this has resulted in a loss for the fourth quarter 2021 in the Investment Bank division (before the goodwill impairment),” the lender said.
It said its core wealth management businesses, which it has been trying to shore up, would also be hit by a slowdown in transactions, resulting in “modestly negative” net new assets for those businesses, “albeit more than offset by inflows in our Asset Management business.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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