Credit Suisse Warns Of Q2 Group-Wide Loss, Cites Investment Bank Pressures

Tom Burroughes

15 July 2022

(Updates with share price.)

revenues have benefited from the higher volatility versus a year ago, low levels of capital market issuance, wider credit spreads and adverse market conditions have hit the investment banking arm.

The trading statement was being issued in response to “recent industry conferences and related trading commentary by our peers and the planned presentation by group CEO Thomas Gottstein at the Goldman Sachs European Financials Conference 2022 on Thursday,” it said.

“Market conditions so far in the second quarter of 2022 have remained challenging, consistent with our published outlook statement of 27 April, 2022. The combination of the current geopolitical situation following Russia’s invasion of Ukraine, significant monetary tightening by major central banks in response to the substantial increase in inflation and the unwind of Covid-related stimulus measures have resulted in continued heightened market volatility, weak customer flows and ongoing client deleveraging, notably in the APAC region,” it said.

Credit Suisse said its reported earnings will also be affected by continued volatility in the market value of its 8.6 per cent investment in Allfunds Group.

The bank intends to operate with a Common Equity Tier 1 capital ratio of around 13.5 per cent in the near-term, in line with its 2024 objective of reaching a CET1 ratio of more than 14 per cent before the planned reforms to Basel III capital rules.

Along with a number of other banks, Credit Suisse has detailed its Russian exposures, saying these were "well managed."