Citing Russia’s invasion of Ukraine and significant monetary tightening, Swiss bank Credit Suisse said it expects to suffer a second-quarter loss, a sign that the firm’s recent volatility is likely to continue.
Costly scandals and ousters led to management changes and restructuring during the past year, but the bank says global conditions caused weak customer flows and a reduction of borrowing by clients, especially in the Asia-Pacific region.
"The impact of these conditions, together with continued low levels of capital markets issuance and the widening in credit spreads, have depressed the financial performance of this division in April and May and are likely to lead to a loss for this division as well as a loss for the Group in the second quarter of 2022,” the bank said in a statement.
Ratings agencies Fitch and Standard & Poor's both downgraded Credit Suisse’s debt ratings in May as the investment bank deals with declining investor confidence. Second-quarter earnings would also be affected by continued volatility in the market value of the bank's 8.6% holding in Allfunds Group, according to the statement.
"We remain focused on the disciplined execution of our strategy, delivering on our regulatory remediation programs and placing risk management at the core of the bank,” the bank added.
Regarding the global economy, U.S. bank leaders have warned, recently, of a dire outlook. JPMorgan Chief Executive Officer Jamie Dimon talked of a coming "hurricane," and Citigroup CEO Jane Fraser said Europe might be poised for a recession, according to CNN Business.
