Credit Suisse posts big loss after U.S. tax settlement
By Katharina Bart
ZURICH (Reuters) - Credit Suisse Group AG will quit commodities trading after chalking up its biggest loss since the financial crisis in 2008, the result of a 1.6 billion Swiss franc ($1.78 billion) fine from U.S. authorities for helping its clients evade taxes.
The Swiss bank reversed a recent vow to stick with its commodities unit, and thus joins the ranks of trading firms answering regulatory demands for more capital by significantly reducing or even shuttering their natural resource trading arms.
Credit Suisse's fixed income unit outshone both its wealthy client unit and its U.S. rivals with a 4 percent rise in sales and trading, flouting its own downbeat guidance in May. That compares to drops of at least 10 percent at American banks like Goldman Sachs and JPMorgan last week.
Credit Suisse said the commodities cuts, set to save $75 million, would allow resources and funds to be reassigned to its private bank, which disappointed investors with a 39 percent drop in revenue and weaker margins, and swung to a loss due to the fine.
"I want to reiterate that we deeply regret the past misconduct that led to this settlement and that we take full responsibility for it," Brady Dougan, chief executive of the Zurich-based lender, said on Tuesday.
Credit Suisse's private bank has been under scrutiny since the bank's guilty plea to the U.S. criminal charge, with investors worried about clients pulling money out of its wealth management business as a result.
"It's hard to exactly estimate the impact but it certainly did have an impact," Dougan told a news conference.
"There may have been clients who didn't do business with us who otherwise would have," he said. Continued...