The bank does not provide any information on the question of when the 2022 annual report will be published exactly.
(Photo: dpa)
Zurich Credit Suisse is postponing the publication of the 2022 Annual Report scheduled for today, Thursday. The US securities regulator SEC turned to the major Swiss bank late on Wednesday with questions, as Credit Suisse announced on Thursday. It is about open SEC comments on accounting issues disclosed last year for fiscal years 2019 and 2020.
It is extremely rare for large listed companies to have to postpone the publication of their annual reports. The step caused uncertainty among investors: the share fell by six percent to CHF 2.50 on Thursday and is thus trading close to its all-time low.
The background: In the 2021 annual report, Credit Suisse informed its shareholders that internal controls had revealed problems with accounting. These relate to the accounting of securities lending transactions.
Among other things, they led to the fact that the balance sheet indicator “cash flow from investing activities” was overstated by 70 million francs, while the balance sheet liabilities were understated by this amount. This also had an impact on the bank’s leverage ratio, which was 0.1 percentage points too low.
At that time, the bank announced that the adjustment to the balance sheet ratios had no significant impact on the annual results for 2019 and 2020. But apparently the US Securities and Exchange Commission was interested in the problems with accounting and the internal control mechanisms with which such errors are actually supposed to be avoided. The supervisors are likely to focus in particular on the incorrect accounting of the leverage ratio, which is after all a key indicator of a bank’s solidity.
Financial results for the past year unaffected
It remains unclear why the SEC contacted Credit Suisse with questions so shortly before the publication of the 2022 annual financial statements. Late Wednesday evening there was a phone call between the bank and the stock exchange supervisory authority on this subject, Credit Suisse said. “Management deems it prudent to defer the release of the financial statements for a short period in order to better understand the comments received.”
>> Read here: Supervision is apparently investigating statements by the President of Credit Suisse about capital outflows
The financial results for 2022, which were published on February 9, are not affected by the inquiries. Credit Suisse did not want to provide any information on the question of when the 2022 annual report will be published exactly. The report usually has to be available to the shareholders before the general meeting. This is scheduled for April 4th at Credit Suisse.
Anke Reingen, banking analyst at investment bank RBC Capital Markets, wrote in an assessment published on Thursday that the bank’s cash flow plays a rather minor role in setting Credit Suisse’s price target.
The adjusted amounts were also small and the adjustments had been disclosed beforehand. But she notes, “However, questions regarding accounting, particularly from the SEC, are negative, especially since the press release points to questions from the SEC regarding related audit controls.”
Last year, the major Swiss bank extensively restructured its top management: In April 2022 it was announced that long-standing CFO David Mathers was leaving the company. His successor, ex-Deutsche Bank manager Dixit Joshi, took over in October 2022. In July 2022, CEO Thomas Gottstein was also replaced by Ulrich Körner.
With a loss of CHF 7.3 billion, Credit Suisse recorded one of the weakest years in its 167-year history in 2022. Above all, the costs for the restructuring and the collapse of income in investment banking weighed on the result. At the end of the year, the outflow of customer funds also caused headwind. The group expects a significant pre-tax loss in the current year as well.
More: Major shareholder leaves Credit Suisse and questions the future of wealth management