Connect with us

Business

Shares Of Credit Suisse Sink After Financial Reporting Reveals ‘Material Weaknesses’

Published

on

Shares Of Credit Suisse Sink After Financial Reporting Reveals 'Material Weaknesses'

(CTN News) – Announcing “material weaknesses” in its financial reporting processes for 2022 and 2021, Credit Suisse’s shares fell to their all-time low early Tuesday.

According to the embattled Swiss lender, the observation was made in its annual report, originally scheduled for last Thursday but postponed due to a late call from the US Securities and Exchange Commission.

SEC discussion centered on “a technical assessment of previously disclosed revisions to the consolidated cash flow statements in 2020 and 2019, as well as controls related to them.”

In its Tuesday annual report, Credit Suisse revealed that “certain material weaknesses” had been identified in its internal controls.

A failure to design and maintain an effective process for identifying and analyzing material misstatements, as well as various communication and internal control flaws, were involved in these issues.

The bank said it was still able to confirm that the financial statements over the years in question “fairly represent [its] consolidated financial position.”

It confirmed its 2022 results announced Feb. 9, which showed a net loss of 7.3 billion Swiss francs ($8 billion) for the full year.

As markets opened Tuesday, shares were down 5%, but they pared losses by the close, ending relatively flat.

Taking a risk with liquidity

During the fourth quarter of 2022, the bank reported “significantly higher withdrawals of cash deposits, non-renewals of maturing time deposits, and net asset outflows than in the third quarter.”

A string of scandals, legacy risk and compliance failures sparked withdrawals of more than 110 billion Swiss francs from Credit Suisse in the fourth quarter.

“These outflows have stabilized to much lower levels, but have not yet reversed. We fell below certain legal entity-level regulatory requirements due to these outflows. We partially Credit Suisse utilized liquidity buffers at the Group level and at legal entity level.”

Liquidity risks have been exacerbated and may continue to be exacerbated by these circumstances, Credit Suisse acknowledged. Reducing assets under management is expected to result in lower net interest income and recurring commissions and fees, which will negatively impact the bank’s capital position.

According to the report, failing to reverse these outflows and restore our assets under management and deposits could negatively affect our financial condition and results of operations.

As part of its ongoing massive strategic overhaul, Credit Suisse has taken “decisive action” on legacy issues, which will result in a further “substantial” financial loss in 2023.

In the bank’s annual report, the board confirmed it had forgone a bonus for the first time in over 15 years, while taking home 32.2 million Swiss francs in fixed compensation.

SEE ALSO:

CPI Report Confirms That Inflation Continues To Be Sticky, Despite The Recent Decreases

Continue Reading

CTN News App

CTN News App

české casino

Recent News

BUY FC 24 COINS

compras monedas fc 24

Volunteering at Soi Dog

Find a Job

Jooble jobs

Free ibomma Movies