Shares of Credit Suisse traded close to all-time lows on Tuesday morning after the bank admitted to “material weaknesses” in its financial reporting as the banking sector grapples with the fallout from the collapse of Silicon Valley Bank (SVB).
Credit Suisse said in its annual financial report that the weaknesses stemmed from a “failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements.” The bank was responding to questions from the Securities and Exchange Commission (SEC) about its cash flow statements from 2019-20, CNN reported. (RELATED: Trading Temporarily Halted For Major Bank Stocks After Pre-Market Collapse)
JUST IN: Credit Suisse says it finds “material weaknesses” in its reporting procedures for the financial years 2022 and 2021 https://t.co/uBdXCTRuVr
— Bloomberg (@business) March 14, 2023
The bank’s stock fell to an all-time low of $2.44 per share on Monday and dropped by 5% in Tuesday morning trading, CNBC reported. Bank stocks continue to reel from the collapse of Silicon Valley Bank over the weekend after SVB became the largest financial institution to collapse since 2008 when regulators seized it on Friday. Shortly after, regulators announced a plan to bail out the bank’s depositors and resume operations.
Credit Suisse concluded that “material weakness could result in misstatements of account balances or disclosures that would result in a material misstatement to the annual financial statements of Credit Suisse,” and promised to develop a “remediation plan” to improve its controls.
The bank disclosed an annual net loss of approximately $8 billion in February, with fourth quarter customer outflows totaling about $120 million, per Reuters.