Credit Suisse shares hung near all-time lows in early Tuesday trading after the Swiss banking giant admitted to discovering “material weaknesses” in its financial reporting over the last two years.
The Zurich-based firm said the weaknesses amounted to a “failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements.”
Credit Suisse said its full-year results were not impacted by the issue and that its financial statements still “fairly present, in all material respects, the Group’s consolidated financial condition.”
Last month, the bank had disclosed a whopping full-year net loss of 7.3 billion francs – the equivalent of approximately $8 billion.
The Swiss bank’s stock fell as much as 5% in Tuesday trading to $2.54, giving it a market capitalization of just $10.25 billion. On Monday the stock hit an all-time low of $2.44.
Shares plunged despite a rally in US markets as embattled regional banks rebounded from a Monday selloff.
The troubling disclosure raised concerns about lingering turmoil in the banking sector after the rapid collapse of Silicon Valley Bank and Signature Bank in New York – with some speculating that Credit Suisse could be next to fall.
The issues emerged even as Credit Suisse’s top brass pursue a complicated restructuring following a series of scandals that have hammered the firm in recent years – including ties to the 2021 implosion of Archegos Capital Management.
Last week, Credit Suisse was forced to postpone the publication of its annual report for 2022 after receiving a last-minute call from SEC regulators.
Follow The Post’s coverage of Silicon Valley Bank’s collapse
Credit Suisse said the outreach from SEC officials was linked to a “technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”
Rich Dad Company co-founder Robert Kiyosaki – an investor who correctly predicted the downfall of Lehman Brothers in 2008 – was among the market experts who raised concerns about Credit Suisse’s stability.
“The problem is the bond market, and my prediction, I called Lehman Brothers years ago, and I think the next bank to go is Credit Suisse,” Kiyosaki said during a Monday appearance on Fox Business Network.
Kiyosaki stated Credit Suisse was in trouble because “the bond market is crashing.”
On Sunday, the Treasury, Federal Reserve and FDIC said they would guarantee all deposits held at the doomed Silicon Valley Bank and another shuttered firm, Signature Bank in New York.
The feds insist that US taxpayers won’t face any costs from the bailout move – though experts told The Post that Americans will pay more through higher bank fees and degraded services.
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March 14, 2023 at 08:24PM
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Credit Suisse shares hit record low as banking giant admits to 'material weaknesses' - New York Post
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