Credit Suisse has been plagued with problems for years. In fact, faced rumors of a potential meltdown as recently as late last year.
In October, social media chatter that the Swiss bank was on the verge of bankruptcy sent stocks into a wild ride.
It also appeared to cost the company dearly: Clients withdrew 111 billion Swiss francs ($121 billion) in the last three months of 2022 amid speculation.
Credit Suisse has since embarked on a massive turnaround plan that will see it cut 9,000 full-time jobs by the end of 2025. The firm will also spin off its investment bank and focus more on wealth management.
But last month the Zurich-based lender announced its biggest annual loss since the 2008 financial crisis, underscoring the scale of the challenge it continues to face.
It lost 7.3 billion Swiss francs ($7.9 billion) in 2022, compared to a loss of 8.2 billion Swiss francs ($8.9 billion) in 2008.
The dismal results follow a series of missteps and compliance lapses that have already cost the bank dearly.
For example, the bankruptcy of the American hedge fund Archegos Capital Management, a client of Credit Suisse, in 2021 cost the bank $5.5 billion. An independent external investigation subsequently revealed “a failure to effectively manage risk”.
Last year, the bank’s chairman also resigned following a board-commissioned investigation which reportedly looked into allegations he broke Covid-19 rules. The investigation would focus on driving, including travel and his personal use of business jets.
The bank’s reputation has also been marred by a spy scandal in recent years, which eventually led to the resignation of its former CEO and COO.
New offer: Credit Suisse said on Wednesday it would borrow up to 50 billion Swiss francs ($53.7 billion) from the Swiss National Bank as it seeks to reassure investors that it has the cash to stay afloat. Investors sent shares of the nation’s second-biggest lender down as much as 30% on Wednesday.
