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| Credit Suisse's Annual Report Delayed by SEC over "Material Weaknesses" in Internal Controls |
The annual report of Credit Suisse Group AG, which was scheduled to be released last Thursday, was delayed by the US Securities and Exchange Commission due to "material weaknesses" in the bank's internal controls over financial reporting. In the report released on Tuesday, the Swiss lender acknowledged that "management failed to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements."
Credit Suisse had announced the delay of its annual report last week after a last-minute call from the SEC. The issues, described as "technical," were related to cash flow statements dating back to 2019. Following the news, shares of the bank fell 4%, trading at a new all-time low in European markets.
Despite the bank's efforts to regain clients, Credit Suisse reported that client deposit outflows continued this month, forcing the bank to use its liquidity buffers. The bank warned that these circumstances could further "exacerbate" liquidity risks. Speaking at a conference hosted by Morgan Stanley on Tuesday, CEO Ulrich Koerner stated his intention to rebuild the business and grow it beyond its previous state after undergoing restructuring.
As part of its ongoing restructuring aimed at restoring profitability, the bank has proposed granting equity to senior managers in its investment banking arm, CS First Boston, which is due to be spun off soon. Under the plan, staff members could own up to 20% of the shares in the venture.
