Credit Suisse tumbles as it posts first annual loss since 2008

Credit Suisse shares tumbled on Thursday after the bank posted its first annual loss since 2008.

The bank reported a pre-tax loss of CHF2.42bn (£1.7bn) for 2015, while the fourth quarter pre-tax loss came in at CHF6.44bn.

Credit Suisse said this included substantial charges, adding that this was not reflective of its underlying business performance.

The bank noted a goodwill impairment of CHF3.8bn – mostly related to its acquisition of US mid-tier investment bank Donaldson, Lufkin and Jenrette in 2000 – restructuring costs of CHF355m and significant litigation items of CHF564.

Revenue in the fourth quarter dropped to CHF4.21bn from CHF6.37 in the same period a year earlier.

CS said the fourth quarter was characterised by volatile market conditions, pressures on market liquidity, a sharp drop in oil prices, widening credit spreads and continued uncertainty linked to unsynchronised monetary policies.

The bank also said it plans to cut around 4,000 positions as it looks to cut costs.

“Given the particularly challenging environment we face, we decided in the fourth quarter to accelerate the implementation of our cost savings program across the bank,” said chief executive officer Tidjane Thiam.

“We have identified and actioned initiatives that will permanently reduce our fixed cost base, resulting in cost savings of CHF500m per annum on a full year run-rate basis.”

Goldman Sachs said the results were weak, “continuing on the broad based Q4 weakness at the peer group, notably Deutsche Bank and UBS”.

At 0938 GMT, Credit Suisse shares were down 12.8% to CHF14.42.