Credit Suisse shares drop as annual report delayed following SEC call

Credit Suisse shares hit a new intraday low on Thursday after the bank delayed the publication of its annual report following a call from the US Securities and Exchange Commission the previous evening over cash flow statements dating back to 2019.

Shares in the bank fell to SFr2.51 in morning trading, dropping more than 5 per cent after the market opened, having hit a previous record low of SFr2.52 last week.

The bank said its financial statements for 2022 — which it published last month — were unaffected and that the SEC’s feedback was of a technical nature, without providing any further information.

“Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received,” the bank said.

The report delay comes at a sensitive time for the group, which announced its second consecutive annual loss last month and said it expected a further loss in 2023.

Customers have withdrawn more than SFr100bn ($106bn) of assets from the bank in recent months, while longtime investors — including former top shareholder Harris Associates — have sold down their stakes.

The SEC’s comments relate to accounting issues Credit Suisse identified in its 2021 annual report in relation to the netting treatment of some securities lending and borrowing activities. This resulted in balance sheet and cash flow positions being understated.

The bank revised its total assets and liabilities by SFr13bn — equivalent to 1.7 per cent of its total assets — for 2020, which meant the cash flow statement was adjusted by SFr70mn.

Credit Suisse also made changes to the cash flow statement for share-based compensation, non-cash exchange rate movements and some cash flow hedges.

The bank said on Thursday that the SEC’s comments also concerned the bank’s related controls of the cash flow statements.

A person with knowledge of the bank’s discussions with the SEC said the regulator had previously raised questions about the cash flow statements, to which Credit Suisse had provided a response.

They added that the bank hoped to publish the annual report as soon as possible but wanted to make sure it had responded to the SEC before doing so.

Anke Reingen, an analyst at RBC, said: “We have generally not focused on cash flow statements; the amounts are relatively small and the restatement was previously disclosed.

“However, questions with respect to accounting, especially from the SEC, are negative, especially as the Credit Suisse press release points to SEC questions with respect to related controls of the revisions.”