Swiss Financial Regulator FINMA Reviews Potential Misleading Remarks by Credit Suisse Chairman Axel Lehmann on Asset Outflows, Commented Outflow Had Stabilized in Early December 2022 with Outflow Flattened Out & Partial Inflow
25th February 2023 | Hong Kong
Swiss financial regulator FINMA is reviewing potential misleading remarks by Credit Suisse Chairman Axel Lehmann on asset outflows in December 2022, commenting outflow had stabilized in early December 2022 with “outflow flattened out & partial inflow”. In 2023 February (9/2/23), Credit Suisse reported outflow of $119 billion (CHF 110.5 billion) in the last 3 months of 2022. For 2022, Credit Suisse reported net loss of CHF 3.2 billion and total assets of CHF 1.294 billion with net asset outflow of CHF 123.2 billion. Ulrich Körner, Chief Executive Officer of Credit Suisse: “2022 was a crucial year for Credit Suisse. We announced our strategic plan to create a simpler, more focused bank, built around client needs and since October we have been executing at pace. We successfully raised CHF ~4 billion in equity capital, accelerated the delivery of our ambitious cost targets, and are making strong progress on the radical restructuring of our Investment Bank. Today’s announcement of our acquisition of the M. Klein & Company investment banking business marks another milestone in the carveout of CS First Boston as a leading independent capital markets and advisory business. The transaction should further strengthen CS First Boston’s advisory and capital markets capabilities. We have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation by re- shaping our portfolio, reallocating capital, right-sizing our cost base, and building on our leading franchises.” See below for Credit Suisse FY2022 performance.
“ Swiss Financial Regulator FINMA Reviews Potential Misleading Remarks by Credit Suisse Chairman Axel Lehmann on Asset Outflows, Commented Outflow Had Stabilized in Early December 2022 with Outflow Flattened Out & Partial Inflow “
Credit Suisse: Summary of FY22 performance
Credit Suisse: Our performance in 2022 underscores the importance of our forward focus on radically transforming the bank, efficiently reducing risk, lowering our cost base, strengthening our capital position and playing to our strengths and core franchises. The Group continues to execute on the decisive strategic actions detailed on October 27, 2022, to create a simpler, more focused, stable bank built around the needs of our clients – a new Credit Suisse.
For the full year ending December 31, 2022, we saw net revenues decrease by 34% year on year, driven by a decline in IB net revenues, down 55% on a USD basis, and a decline in WM net revenues, down 30%. We also saw a decrease in AM net revenues, down 14% year on year and in SB revenues which were down 5% year on year. Our reported net revenues of CHF 14.9 bn included real estate gains of CHF 368 mn and a valuation loss of CHF 586 mn related to our equity investment in Allfunds Group.
We reported operating expenses of CHF 18.2 bn, down 5% year on year, which included major litigation provisions of CHF 1.3 bn and restructuring expenses CHF 533 mn. Our FY22 adjusted* operating expenses of CHF 16.2 bn were below previous guidance of CHF ~16.5-17.0 bn, and up 1% year-on-year. The full impact of the cost transformation actions taken in 4Q22 are expected to be seen in FY23.
We reported a pre-tax loss of CHF 3.3 bn for FY22, compared to a pre-tax loss of CHF 600 mn for FY21. Our adjusted* pre-tax loss for FY22 was CHF 1.3 bn, which compares to an exceptionally strong adjusted* pre-tax income of CHF 6.6 bn for FY21.
Our reported net loss attributable to shareholders for FY22 is CHF 7.3 bn, compared to a net loss attributable to shareholders of CHF 1.7 bn in FY21. The net loss attributable to shareholders for FY22 included an impairment of deferred tax assets related to our strategic review of CHF 3.7 bn taken in 3Q22.
Our Group net asset outflows for FY22 were CHF 123.2 bn, compared to NNA of CHF 30.9 bn for the same period in 2021.
Credit Suisse
Credit Suisse is one of the world’s leading financial services providers. The bank’s strategy builds on its core strengths: its position as a leading wealth manager, its specialist investment banking and asset management capabilities and its strong presence in its home market of Switzerland. Credit Suisse seeks to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. The bank employs more than 50,000 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
FINMA
FINMA is Switzerland’s independent financial-markets regulator. Its mandate is to supervise banks, insurance companies, financial institutions, collective investment schemes, and their asset managers and fund management companies. It also regulates insurance intermediaries. It is charged with protecting creditors, investors and policyholders. FINMA is responsible for ensuring that Switzerland’s financial markets function effectively.
When FINMA commenced its activities on 1 January 2009, the Swiss parliament granted it a greater degree of independence than its three predecessor institutions. The institutional, functional and financial independence FINMA enjoys enables it to exercise effective supervision over Switzerland’s financial industry.
Institutional independence
To ensure its institutional independence, FINMA was established as a public law institution in its own right. It is governed by a board of directors and managed by an executive board. This greater autonomy places more stringent requirements on FINMA’s management structures and the checks and balances underpinning them. Strong corporate governance is a key prerequisite for a credible, independent supervisory authority.
Functional independence
Because FINMA is functionally independent of Switzerland’s political authorities, neither Swiss Parliament nor the government can issue directives on how it carries out its regulatory duties. While FINMA acts as an independent authority, it nevertheless forms part of Switzerland’s political structures and the balancing and control mechanisms they incorporate. Most notably, it is subject to parliamentary scrutiny and must account to the parliamentary commissions overseeing its work.
Financial independence
FINMA is financed not by the taxpayer, but by the levies and fees it charges for its supervisory work. In addition, the institutions FINMA regulates are required to pay an annual levy to cover the costs incurred by FINMA which are not met by the fees. The levies relate to supervision and other FINMA services. FINMA’s accounts are audited by the Swiss Federal Audit Office.
Mandate and tasks
FINMA is mandated to protect financial market clients – creditors, investors and policyholders – and is responsible for ensuring that Switzerland’s financial markets function effectively. Its supervisory tasks – authorisation, supervision and, where necessary, the enforcement of supervisory law – are derived from that mandate. In addition, FINMA can also regulate activities where it is authorised to do so. In performing its supervisory activities, FINMA adopts a systematic risk-oriented approach and is mindful to ensure continuity and accountability. This strengthens confidence in the proper functioning, integrity, competitiveness and sustainability of Switzerland’s financial centre.
Strategy and organisation
Based on legally defined tasks and objectives, FINMA’s Board of Directors draws up strategic goals, which it submits to the Federal Council for approval every four years. To enable it to achieve its strategic goals, FINMA has an appropriate organisational structure with a clear distinction between strategic management through the Board of Directors and operational management through the Executive Board. The Board of Directors defines the strategic course, decides on transactions of substantial importance and oversees the Executive Board. Eight divisions ensure that FINMA fulfils its mandate efficiently and uses its financial resources responsibly and effectively.
Deployment of third parties
In order to meet its goals, FINMA delegates part of its supervisory work to audit firms and also appoints agents who are deployed on a case-by-case basis.
Cooperation in Switzerland and abroad
Finally, FINMA fosters national cooperation and, on the international stage, it represents Switzerland and its principle-based regulatory approach in competent specialist committees. It also responds to requests for assistance from foreign supervisory authorities.
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