Credit Suisse posts fourth-quarter profit loss, 22% annual fall on back of legal troubles

ZURICH (Reuters) – Credit Suisse on Thursday posted a 22% fall in 2020 net profit as a 757 million franc hit from legal charges placed Switzerland’s second-largest lender in the red for the final three months of the year.

The bank posted a 353 million Swiss franc ($392.79 million) net loss for the fourth-quarter, compared with expectations for a 566 million franc loss in its own poll of 18 analysts.

The poll was compiled before the bank settled a legacy residential mortgage-backed security case for $80 million less than it had previously flagged.

“Despite a challenging environment for societies and economies in 2020, we saw a strong underlying performance across Wealth Management and Investment Banking, while addressing historic issues,” Chief Executive Thomas Gottstein said in a statement.

“Looking forward into 2021 and beyond, we aim to further accelerate growth in Wealth Management and deliver sustainable returns in Investment Banking.”

Wealth managers have profited richly off bumper trading and client demand for greater counsel during the COVID-19 pandemic, helping rivals UBS Group AG and Julius Baer Gruppe AG post windfall gains. Credit Suisse, however, faced setbacks in its core business last year everywhere outside Asia.

Outside Asia, only Credit Suisse’s investment bank managed to post profit gain in 2020, as higher expected lending losses and headwind from negative interest rates and a strong Swiss franc bit into earnings.

Factoring out one-off gains that boosted results in 2019 and set it back in 2020, the bank said it would have seen a 6% pre-tax profit gain for the year.

($1 = 0.8987 Swiss francs)

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