Credit Suisse Group AG said Wednesday that it is likely to post a loss for the second quarter, as it continues to face challenging market conditions while it presses on with a restructuring.
The Swiss lender
said it faced more volatile markets, weak customer flows and continued debt reduction by clients, especially in the Asia-Pacific and China region. The past two quarters have been unprofitable for the bank.
The investment bank’s performance was depressed in April and May, and the unit will likely post a quarterly loss, Credit Suisse said. The division is being trimmed down amid a decision to reduce risk and shift focus toward wealth management.
Credit Suisse also said it plans to keep a common equity Tier 1 ratio–a measure of capital strength–of around 13.5% in the short term. It targets a CET 1 ratio of more than 14% for 2024.
Legal costs to settle legacy scandals and a weakened financial performance as the bank executes a plan to dial down risk following the twin collapses of Greensill Capital and Archegos Capital Management–which resulted in a financial hit of several billions of dollars–have likely eaten away some of the bank’s capital.
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