Credit Suisse sees fourth-quarter break-even pre-tax profit, investment banking loss

(RTTNews) – Swiss lender Credit Suisse Group (CS) said on Tuesday that it now expects pre-tax profit to be roughly break-even for the fourth quarter of 2021.

Reported earnings for the fourth quarter of 2021 will be negatively impacted by litigation provisions of approximately 500 million Swiss francs. These will be partly offset by capital gains on real estate sales of 225 million francs.

The company said it expects the balance before deduction of previously announced goodwill impairment of around CHF 1.6 billion, including around CHF 1.5 billion in the Investment Bank division and around CHF 0.1 billion. francs in the Asia-Pacific division.

Regarding underlying business results, the company said there was a reduction in transaction-based revenue in the investment banking and wealth management businesses.

The company sees a loss in the Investment Bank division for the fourth quarter, before goodwill impairment.

In the wealth management business, net asset inflows in the fourth quarter will be slightly negative. The company noted that there had been a significant slowdown in transaction activity in the International Wealth Management and Asia Pacific divisions.

The group’s CET1 ratio at the end of 2021 should exceed the ambition of 14%, while the Tier 1 leverage ratio at the end of 2021 should exceed 6%.

The company plans to provide a full fourth quarter financial performance update on February 10.

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