Thu, Mar 9th 2023
Credit Suisse says it will not be able to publish its annual report this week after receiving a “late call” from the U.S. Securities and Exchange Commission (SEC) with questions about the flailing bank’s figures.
Apparently, the SEC has questions about the revisions the bank made to its cash flow statements for 2019 and 2020.
“Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received,” the bank stated. When the bank announced that its 2022 annual report would not be published on time, shares in the bank – which were already trading at record lows – plunged another 5%.
Credit Suisse has been plagued by years of scandals, court cases, and record-breaking losses. The bank dropped from a profit of CHF 2.7 billion in 2020 to a loss of CHF 1.65 billion in 2021, mostly due to bad investments in failed supply chain group Greensill and hedge fund group Archegos. In the 2021 collapse of the hedge fund, U.S. authorities have charged Archegos’ founder Bill Hwang and three colleagues with racketeering and fraud charges.
In October of 2021, U.S. and U.K. authorities handed down a verdict that Credit Suisse must pay CHF 439 million to resolve a Mozambican corruption scandal which included bribery and fraud charges. The same week, the Swiss Financial Market Supervisory Authority announced it had discovered “serious organization shortcomings” in its investigation into a corporate espionage case that began with a 2020 audit of the bank. According to the investigation, Credit Suisse spied on members of its board and former employees. By 2022, bad headlines became synonymous with the bank and #DebitSuisse was trending on Twitter.
In October of 2022, Credit Suisse Chairman Axel Lehmann made an attempt to shore up confidence by announcing a radical restructuring plan, but rumors of its true financial health scared off many of their wealth management clients. UBS was the main recipient of customers pulling their cash out of Credit Suisse accounts. UBS saw a 23% increase in pre-tax profits for its last quarter of 2023, thanks to an influx of Credit Suisse clients. (Last week’s Credit Suisse scandal: Client data stolen).
In the last three months of 2022 customers withdrew about 111 million Swiss francs – most of it went to Switzerland’s largest bank, UBS. The Swiss bank regulator, FINMA announced that it is trying to establish the extent to which Credit Suisse knew that clients were leaving in droves when the bank’s chairman Axel Lehmann told press that outflows had stopped.
The latest news from the SEC comes only days after the bank’s biggest shareholder, U.S. investment firm Harris Associates, this week sold its entire stake in the bank. Harris Associates owned as much as 10% of Credit Suisse’s stock in 2022.
Stay tuned for more.
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