Credit Suisse finds ‘material deficiencies’ in its financial statements

Swiss bank Credit Suisse said it intends to make changes to its audit and internal control procedures as the bank’s financial statements have contained “significant deficiencies” in recent years.

This is stated in the company’s annual report, the presentation of which was postponed for several days due to claims from the US Securities and Exchange Commission (SEC). Then Credit Suisse reported that the SEC had some questions about the free cash flow reports for 2019 and 2020. The report released today states that “the group’s internal control over financial reporting was not effective” in 2021 and 2022. “Management also concluded that our controls and disclosure procedures were not effective,” the report states. At the same time, the bank clarifies that the lack of control results in the inability to effectively assess the risks for the company.

Despite this, Credit Suisse argues that the identified shortcomings do not mean that the results of the bank, stated in the past and current financial statements, were false. The bank confirmed a net loss for 2022 of CHF 7.3 billion, the worst result for Credit Suisse since the 2008 global financial crisis. Given this, the chairman of the board of directors of the bank, Alex Lehmann, asked to reduce his annual bonus from 3 million to 1.5 million francs. The board of the bank granted this request.

Kirill Sarkhanyants