Switzerland’s scandal-hit banking giant Credit Suisse Group AG yesterday said that it was appointing a new chief executive as higher litigation costs, financial market volatility and rising interest rates worldwide pushed it deeper into the red in the second quarter.
“Our results for the second quarter of 2022 are disappointing, especially in the investment bank division, and were also impacted by higher litigation provisions and other adjusting items,” outgoing chief executive officer Thomas Gottstein said in a statement.
“The bank’s performance was significantly affected by a number of external factors, including geopolitical, macroeconomic and market headwinds,” said Gottstein, who at the same time announced his resignation at the helm of Switzerland’s second-biggest bank.
Photo: Bloomberg
“Today marks a leadership change for Credit Suisse,” said Gottstein, who joined the executive board in 2015 and was appointed CEO in 2020. “It has been an absolute privilege and honor to serve Credit Suisse over these past 23 years.”
Gottstein is to be replaced by Ulrich Koerner, head of asset management, with effect from Monday next week.
Turning to its quarterly results, Credit Suisse said it booked a net loss of 1.593 billion Swiss francs (US$1.65 billion) in the period from April to last month, wider than the loss of SF273 million in the preceding three months and down from net profit of SF253 million in the second quarter of last year.
“As stated in our trading update on June 8, the second quarter was marked by challenging economic and market conditions,” the bank said.
“The combination of the current geopolitical situation following Russia’s invasion of Ukraine and significant monetary tightening by major central banks in response to the substantial increase in inflation have resulted in continued heightened market volatility, weak customer flows and ongoing client deleveraging,” it said.
Looking ahead, Credit Suisse said it expected the current market conditions “to continue for the coming months.”
Trading so far in the third quarter “has been marked by a continued weakness in client activity, exacerbating normal seasonal declines,” it said.
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