Credit Suisse delays annual report after SEC call, shares drop

SEC Raises Questions About Bank’s Previous Financial Statements SEC Questions Relate To Consolidated Cash Flow Statements, Related Controls Bank Says 2022 Financial Results ‘Not Impacted’ Analyst Describes Bank As ‘Big Construction Site’ construction’

ZURICH, March 9 (Reuters) – Credit Suisse has delayed the release of its annual report after a last-minute call from the U.S. Securities and Exchange Commission (SEC), which raised questions about its financial statements. previous financial

The unusual intervention by the US regulator is the latest blow to Credit Suisse as the lender is beset by a series of scandals and setbacks that have sent its share price tumbling and led to customers withdrawing billions.

Shares of Credit Suisse fell about 6% and near their all-time low in early afternoon trading in Zurich on Thursday.

The bank said the SEC had subpoenaed it late Wednesday regarding “certain open SEC comments regarding the technical evaluation of previously disclosed revisions to the consolidated statements of cash flows for the years ended December 31, 2020 and 2019, as well as relevant controls”.

The bank had reviewed how it had booked a number of cash flows, including share-based compensation and foreign exchange hedging.

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Credit Suisse said that after the call it decided to postpone the publication of the annual report.

“Management believes it is prudent to briefly delay the publication of its accounts in order to more fully understand the comments received,” he said, adding that 2022 financial results are “not affected”.

The SEC did not immediately respond to a call and an email request for comment made by Reuters outside business hours.

Regulatory authorities other than the SEC were not involved, a person familiar with the matter said.

The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021. REUTERS/Arnd Wiegmann/File Photo/File Photo’CONSTRUCTION SITE’

It remains unclear when the 2022 annual report will be published.

The bank’s announcement did not sit well with analysts.

Daniel Bosshard of Luzerner Kantonalbank described Credit Suisse as “a huge construction site” and said “the stock is only suitable for return speculators”.

Vontobel’s Andreas Venditti said the development “doesn’t help investor sentiment and doesn’t help rebuild confidence”.

In February, Credit Suisse Group reported that 2022 brought its biggest annual loss since the 2008 global financial crisis, as shocked customers pulled funds from the bank and warned that a further “significant” loss was to come this year.

Switzerland’s second-largest bank has begun a major overhaul of its business, cutting costs and jobs to revive its fortunes, including creating a separate business for its investment bank under the CS brand First Boston.

Among a string of scandals, Credit Suisse was hit hard by the collapse of US investment firm Archegos in 2021, as well as the freezing of billions in supply chain finance funds linked to bankrupt British financier Greensill.

Other scandals that rocked the bank included a prosecution in Switzerland involving money laundering for a criminal gang.

Last November, rating agency Standard & Poor’s downgraded the bank to just one level above junk.

Additional reporting by John Revill in Zurich; editing by John O’Donnell and Tomasz Janowski

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