ZURICH, Switzerland―Swiss banking giant Credit Suisse said Wednesday that litigation costs and the financial fallout from the war in Ukraine pushed it deeper into the red in the first three months of the year.
“The first quarter of 2022 has been marked by volatile market conditions and client risk aversion,” Switzerland’s second-biggest bank said in a statement.
“The economic environment and market conditions throughout the quarter placed challenges on a number of our business areas with changes in interest rate expectations, inflationary pressures, as well as geopolitical tensions impacting wider market conditions and business activity,” the statement said.
Credit Suisse, which had already warned a week ago that it would take a financial hit from Russia’s invasion of Ukraine, calculated that the related losses amounted to 206 million Swiss francs (200 million euros, $214 million) in the period from January to March.
As a result, the bank booked bottom-line net loss of 273 million francs in the three-month period, slightly wider than the loss of 252 million francs a year earlier.
In addition, Credit Suisse said its operating expenses were higher year-on-year, driven in particular by higher litigation expenses of 703 million francs.
Looking ahead, “the combination of the current geopolitical situation following Russia’s invasion of Ukraine and the significant monetary tightening initiated by several of the major central banks in response to inflation concerns have resulted in heightened volatility and client risk aversion so far this year,” Credit Suisse warned.
Separately, the group said its chief financial officer, David Mathers, was stepping down.
Mathers, who has served as CFO since 2010 and as CEO of Credit Suisse International since 2016, “has indicated his wish to seek alternative opportunities outside of Credit Suisse,” the bank said.
Mathers had agreed “to continue his responsibilities until suitable successors for both of his roles have been found, ensuring an orderly transition.”