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Credit Suisse (CSGN) stock price is down. Meanwhile, the bank has released its first earnings report after the spying scandal and the resignation of its former CEO.Credit Suisse Group AG (SWX: CSGN) stock price is falling. The stock price of the Swiss bank fell to around 7.5 CHF (-2.49%). This, surprisingly, comes as the financial institution has presented better than expected earnings. The good tidings come with a caveat though.Credit Suisse (CSGN) Stock Price Rose in Q1 but Liabilities PersistAbout billion is being set aside for writedowns and bad loans. This is one of the biggest provisions in more than ten years.The good news, however, is that the Bank has reported a 75% increase in profits in its first quarter. The profits also represent another first. Thomas Gottsein is the new
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Credit Suisse (CSGN) stock price is down. Meanwhile, the bank has released its first earnings report after the spying scandal and the resignation of its former CEO.
Credit Suisse Group AG (SWX: CSGN) stock price is falling. The stock price of the Swiss bank fell to around 7.5 CHF (-2.49%). This, surprisingly, comes as the financial institution has presented better than expected earnings. The good tidings come with a caveat though.
Credit Suisse (CSGN) Stock Price Rose in Q1 but Liabilities Persist
About $1 billion is being set aside for writedowns and bad loans. This is one of the biggest provisions in more than ten years.
The good news, however, is that the Bank has reported a 75% increase in profits in its first quarter. The profits also represent another first. Thomas Gottsein is the new CEO. These are his first numbers.
The financial giant earned about 1.31 billion CHF ($1.34 billion). This profit covers the quarter to March 31. This is up from 749 million CHF from a year before. The financial giant had set aside about 568 million CHF for liabilities. many of these liabilities have arisen as a result of the COVID-19 situation.
Businesses have all but ground to halt. There seems to be no respite or end in sight for the business failures across the board. As such, most businesses and individuals can’t meet their credit obligations.
The Swiss financial institution has noted this. It has anticipated that the uncertainties surrounding COVID-19 may continue for a bit. For how long isn’t known yet. The 568 million CHF set aside is a far cry from the 81 Million CHF set aside for similar purposes a quarter ago.
The Bank said in a statement:
“The scale of the adverse economic impact of the COVID-19 crisis is still difficult to assess and we would caution that we may also see further reserve build and impairments in the coming quarters, particularly in our Corporate Bank and other loans, outside Switzerland, as well as from our investments in Asset Management,”
The COVID-19 pandemic is still an unknown quantity in many regards. This is because it is still hard to quantify the business losses and other numbers due to the coronavirus.
COVID-19 Incurred Losses Are Growing
As the losses continue to mount, certainly, business is no longer the same by a wide margin.
This does not mean that recovery is not possible. Recovery will occur but will be painful. This will occur until a vaccine, cure, or effective treatment schedule is found.
All businesses have to lick their wounds.
Credit Suisse seems to be going in the right direction. The numbers show that it is still fundamentally sound. The first earnings report occurs after the spying scandals. The step down of its former CEO Tidjane Thiam was a consequence of the scandal.
Gottstein said in the statement:
“In my first quarter as CEO of the group we all witnessed a highly challenging environment with a severe impact from the COVID-19 pandemic. We delivered a resilient performance, while absorbing a significant reserve builld of over 1 billion francs.”
They are certainly headed in the right direction.
Christopher Haruna Hamman is a Freelance content developer, Crypto-Enthusiast and tech-savvy individual. He is also a Superstar Content Developer, Strategy Demigod, and Standup Guy.