Credit Suisse vows to reform risk management after a series of scandals

Credit Suisse has vowed to press ahead with risk management and compliance reform in light of a string of scandals, despite what its CEO has described as a “challenging” environment.

The beleaguered Swiss lender will hold an Investor Deep Dive event on Tuesday, to outline its priorities and progress to date on reforms across the risk, compliance, technology and operations functions, along with the wealth management business.

Credit Suisse warned earlier this month that it was likely to incur a loss for the second quarter, as the war in Ukraine and tightening monetary policy put pressure on the investment bank.

It comes after a series of scandals and incidents at the bank in recent years. It posted a net loss for the first quarter of 2022 as it continued to struggle with litigation costs related to the collapse of the Archegos hedge fund.

The bank saw huge losses in the wake of the collapse of US hedge fund Archegos Capital, as it cut ties with the troubled family office.

“Despite the challenging market environment, we remain highly focused on implementing our strategic plan during the 2022 transition year and on enhancing our risk culture – critically, while staying close to our customers,” said Thomas Gotstein, CEO of Credit Suisse, in an earlier statement. From the investor event on Tuesday.

“At the same time, we continue to drive the bank’s digital transformation, which is essential to building a strong, scalable, and agile organization that is fit for the future.”

In its presentation to investors, the bank will outline how the Archegos collapse has highlighted weaknesses in risk management, where “the sustainability of results has deviated from historical performance.” It was also shown how to re-calibrate the overall risk profile to reduce exposure to higher risk areas in the market.

A string of scandals has prompted some shareholders to demand a change of leadership just two years after Gottstein took over from former chief executive Tidjan Thiam, who resigned after a protracted spying story.

However, Chairman Axel Lehmann told CNBC in May that CEO Thomas Gottstein has the full support of the board to continue to “rebuild” the company.

Meanwhile, the Swiss Federal Criminal Court on Monday convicted Credit Suisse and a former employee of failing to prevent money laundering by a Bulgarian cocaine-smuggling ring between 2004 and 2008. The banks.