The Swiss banking giant, Credit Suisse, has confirmed a yearly loss of CHF 7.3 billion in a delayed report lodged in the United States. The filing was initially due to appear last week, but its publication was postponed following the US Securities and Exchange Commission (SEC) call regarding cash flow statements dating back three years.

Credit Suisse Publishes Delayed Financial Report

In its latest regulatory filing, the Swiss lender highlights the "material weaknesses" it has identified in its control and reporting processes over the past two years, responding to questions from the US regulator from last week that led to the delay in publication.

The Zurich-based bank said on Tuesday that it intends to take steps to improve the ineffective controls it currently has in place. However, the lender acknowledged that the 2021 and 2022 statements fairly reflected information about its financial health.

In addition, Credit Suisse referred to the dynamic capital outflows seen in 2022, when assets under management shrank by 20%. According to the institution, the dynamics of the negative flows have been mitigated but "not yet reversed."

FINMA Monitors Credit Suisse after SVB Collapse

The timing of the US-based Silicon Valley Bank (SVB) collapse is arguably one of the worse for Swiss Credit Suisse. The institution is struggling with its own problems, and the panic caused by the bankruptcy of SVB has caused the Swiss bank's shares to slide to new historic lows. To make matters worse, the cost of insuring the giant's debt reached historic highs.

FINMA, the local financial markets regulator, is keeping a close eye on the fortunes of Credit Suisse as it is concerned about the potential risk of contagion to domestic banks and insurers after the collapse of SVB as well as Signature Bank in recent days.

In early February, Credit Suisse reported a net loss of CHF 7.3 billion in 2022, compared to analysts' CHF 6.53 billion forecasts. The results were confirmed in a delayed report filed with the SEC on Tuesday.

The fourth quarter results fell short of projections and were a nail in the lender's coffin. The net loss amounted to CHF 1.4 billion, CHF 800 million higher than was forecasted. The problems faced by the lender resulted in a total of CHF 110.5 billion of capital outflow in 2022. Total assets under management amounted to CHF 1.3 trillion at the end of the year, falling 20% from a year earlier.

Credit Suisse Under Restructuration

Credit Suisse's problems began to make headlines back in 2022 when its results for the third quarter showed a net loss of CHF 3.8 billion. At the time, the bank cited the need for a "radical restructuring" in which it planned to lay off up to 9,000 employees, raise $4 billion in fresh capital and establish CS First Boston as an independent investment entity in the US.

The first job cuts started in January and affected positions in European investment banking. Further reductions in this sector, but in the Japanese market, were reported last week.

"From today, we are taking a series of decisive actions to re-focus Credit Suisse around the needs of our clients and stakeholders," Körner promised in October.

While Credit Suisse's plans are ambitious, the market conditions are becoming less favorable each week. As the banking giant tries to steer clear of regulatory controversy, FINMA is wrapping up an investigation in the $10 billion 'Greensill' case. The latest banking sector problems triggered by SVB's collapse certainly make additional restructuring difficult, and some experts wonder whether the Swiss bank will find itself on the brink of insolvency soon.