By Scott Kanowsky
Investing.com - Credit Suisse Group AG (SIX:CSGN) shares fell sharply on Wednesday, after the Swiss bank warned it will likely slide to a group-wide loss in the second quarter, citing "challenging" market conditions that have led to weakness at its key investment banking division.
The Swiss bank said the unit has been partly hit by volatility stemming from the conflict in Ukraine, "significant" monetary tightening by central banks to tackle rising inflation, and the end of Covid-era stimulus measures.
"[T]hese conditions, together with continued low levels of capital markets issuance and the widening in credit spreads, have depressed the financial performance of this division in April and May and are likely to lead to a loss for this division as well as a loss for the Group in the second quarter of 2022," Credit Suisse said in a statement on Wednesday.
Switzerland's second-biggest lender also said the volatility has led to "weak customer flows and client deleveraging", particularly in Asia.
The company did not specify how much it expects to lose in the second quarter.
The announcement comes after Credit Suisse unveiled a plan in April to revamp its executive team, as the bank looks to rebound from a series of recent crises that contributed to it posting a loss in the first quarter.