Shares of Credit Suisse (CS) fell anew on Tuesday after the lender reported “material weakness” in its financial reports for the past two years, the latest hiccup for the already struggling bank.
- The Swiss lender had losses of $8 billion in 2022, its worst performance since the global financial crisis.
- The bank cut bonuses for executives in the wake of poor performance.
- Auditors reported that the bank experienced 'significantly higher cash withdrawals,' from which the bank has yet to fully recover.
The bank reported losses of $8 billion in 2022, its worst year since the global financial crisis. The report comes late, as questions from the U.S. Securities and Exchange Commission delayed the release.
In its annual financial report, the bank said "internal control over financial reporting was not effective,” because it didn't identify the risk of material misstatements in account balances. The bank is working to develop a plan to address the weaknesses and said the statements still fairly represent its financial condition.
Shares in the Swiss bank fell last week after the bank said the report's release would be delayed, and again on Monday after the collapse of Silicon Valley Bank and Signature Bank in the U.S. led investors to pull money, roiling global bank stocks.
The bank's losses, perpetuated by significant cash withdrawals throughout 2022, have left it weak. Chairman Axel Lehmann agreed to waive a share award worth $1.6 million because the firm performed so poorly.
In this week's report, auditors PricewaterhouseCoopers wrote that during the early fourth quarter of 2022, Credit Suisse began having “significantly higher withdrawals of cash deposits.” The outflows stabilized through the quarter, auditors wrote, but hadn't reversed by the end of the calendar year. In response, the bank limited its access to capital markets during that period.