© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at a branch office in Bern, Switzerland October 28, 2020. REUTERS/Arnd Wiegmann/File Photo
ZURICH (Reuters) -Credit Suisse on Thursday posted a 78% fall in second-quarter net profit, as a steep drop in its investment banking revenues sharpened the blow from recent Archegos and Greensill scandals.
Net profit of 253 million Swiss francs ($278.45 million) missed average forecasts for 334 million Swiss francs in the bank’s own poll of 18 analysts.
Meanwhile, it unveiled its findings from an investigation into the Archegos matter.
” Credit Suisse (SIX:) delivered resilient underlying second quarter results and strong capital ratios as we are benefiting from having taken decisive actions to address the challenges raised by the Archegos and Supply Chain Finance Funds matters. We take these two events very seriously and we are determined to learn all the right lessons,” Chief Executive Thomas Gottstein said in a statement.
Analysts had expected a nearly $600 million hole caused by more losses at stricken fund Archegos and further weakness in the bank’s trading and advisory businesses to bring second-quarter net profit down to a quarter of its value a year ago.
Excluding Archegos and other significant items, Credit Suisse said pre-tax income would have dropped 11%.
Switzerland’s second-biggest bank has been reeling from the aftermath of twin shocks unleashed in March, when its prime brokerage business lost more than any other competitor from the collapse of family office Archegos, and as its asset management division scrambled to return some $10 billion of client investments linked to insolvent supply chain finance firm Greensill.
In a 165-page review, law firm Paul Weiss, Rifkind, Wharton & Garrisson gave a damning assessment of the bank’s risk management practices in its prime services unit and broader investment bank, though it did add there was no evidence of fraudulent or illegal activity.
“The Archegos matter directly calls into question the competence of the business and risk personnel who had all the information necessary to appreciate the magnitude and urgency of the Archegos risks, but failed at multiple junctures to take decisive and urgent action to address them,” the report.
($1 = 0.9086 Swiss francs)
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.