Credit Suisse posts $1.6 bn loss in fresh blow to recovery, names new CEO

Credit Suisse Group AG posted its third straight quarterly loss after investment banking revenue declined and clients pulled money, underscoring the Swiss firm’s challenges in exiting its worst slump since the financial crisis.

The Zurich-based bank reported a net loss of 1.59 billion Swiss francs ($1.6 billion) in the three months through June, driven by a loss at the investment bank and trading businesses and higher litigation expenses. The bank saw net outflows of 7.7 billion francs as clients traded less and cut risk in response to gyrating equity markets.  

Chief Executive Officer Thomas Gottstein and Chairman Axel Lehmann had been seeking to steer the bank back to profitability -- and stability -- after scandals such as the blow-up of Archegos Capital Management eroded investor confidence, weakened key businesses, and prompted an exodus of talent. The bank is again overhauling its leadership, with Gottstein stepping down after 23 years. Ulrich Koerner, head of the asset management business, will become the new CEO.

“Our results for the second quarter of 2022 are disappointing,” Gottstein said in a statement. The bank is also working on a comprehensive review to strengthen its pivot to wealth management.

Credit Suisse warned in June that it would post a loss due to a drop in bond and stock issuance and widening credit spreads hitting trading and dealmaking. Risk aversion by wealthy clients in Asia is also hampering its wealth business. The loss last quarter adds to a losing streak that includes rising bills to cover the cost of litigation in the first three months of the year and a surprise 2 billion franc impairment hit at the end of last year.