Credit Suisse Group AG said Wednesday that it expects to report a loss for the first quarter as a result of setting aside more money for legal issues.
It also flagged that its franchise faced headwinds during the quarter. “Our underlying results have been adversely impacted by a reduction in capital market issuances and by lower business activity,” the bank said.
This is the second consecutive quarter in which the Swiss lender
has warned of a hit to profits from legal costs. The bank has faced a series of legal cases recently, and is still working to draw a line under the collapse last year of Greensill Capital, with which Credit Suisse’s asset-management unit ran $10 billion in investment funds. The funds had to be frozen and Credit Suisse is trying to get the money back for investors.
Credit Suisse said it increased litigation provisions by about 600 million Swiss francs ($629.9 million), taking the total sum set aside for legal matters in the first quarter to about CHF700 million. All the matters originated more than a decade ago, it said.
Credit Suisse also said it estimates that the war in Ukraine will result in about CHF200 million of negative revenue and credit-loss provisions.
It has already flagged about CHF350 million in losses from the drop in value of its stake in Allfunds Group PLC.
The bank said it has recovered about CHF170 million in provisions related to claims against Archegos Capital Management, an asset manager that collapsed last year. It has also booked real-estate gains of about CHF160 million, it said.
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