Credit Suisse issued a statement on Wednesday, revealing that it is expecting negative impacts on its first-quarter earnings due to the impact of its business in Russia and several litigation provisions.
It expects to post a loss for the quarter due to a $210 million (around CHF 200 million) hit to its revenues and provisions for credit losses.
The Zurich-headquartered bank stopped pursuing new business in Russia in late March and started efforts to cut its exposure in the country. It earlier said that it had around $914 million exposure in Russia, calling it “not significant.”
But, increasing litigation cost is a massive concern for the Swiss bank. The total litigation provisions of the bank for the quarter could be approximately CHF 700 million, adding around CHF 600 million, mostly from the previously disclosed legal matters that originated more than a decade ago.
Last month, the bank revealed that it was expecting its Bermuda life insurance subsidiary to pay a sum in excess of $500 million for a potential court judgment against it. In 2021, the bank sided around 1.1 billion Swiss francs as 'major litigation provisions'.
The Swiss bank is expected to publish its financials for the period between January and March next week.
Riddled with Controversies
Credit Suisse is the second-largest Swiss bank, but it is riddled with controversies. It was accused of offering banking services to a large base of clients with criminal backgrounds. In addition, it has become the first lender in the country to face criminal charges.
In the latest announcement, the bank highlighted that its first-quarter results would include CHF 350 million losses related to a decrease in value of an 8.6 percent stake in Allfunds Group.
But, the Swiss lender is expecting to partially offset these losses with recovery in provisions of around CHF 170 million from its claims against collapsed-Archegos and also from approximately CHF 160 million in real estate gains.
