(Reuters) — Credit Suisse said in its 2022 annual report that it has identified “significant weaknesses” in internal controls over financial reporting and has not yet stemmed client outflows.
“As of December 31, 2022, the group’s internal control over financial reporting was not effective, and for the same reason, management has reassessed and reached the same conclusion regarding December 31, 2021,” it said in a filing published on Tuesday.
Auditor PricewaterhouseCoopers in the report included an “unfavorable opinion” on the effectiveness of the bank’s internal control over its reporting, but its statements “present fairly, in all material respects”
; the bank’s financial position in 2020 to 2022.The reporting weaknesses come as Credit Suisse tries to recover from a series of scandals that have undermined investor and client confidence. Customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion).
On Tuesday, the bank said “outflows (had) stabilized to much lower levels but had not yet reversed.”
The cost of insuring against a Credit Suisse debt loss rose to a record 520 basis points, according to S&P Global Market Intelligence.
Banks around the world have been swept up in a sell-off following the collapse of two US lenders last week that forced regulators to step in and guarantee deposits.
Swiss regulator FINMA said on Monday it was trying to identify possible contagion risks for the country’s banks and insurance companies following the collapse of the US banks.
The annual report, which was scheduled to be released last week, was delayed after a request from the US Securities and Exchange Commission, which had raised questions about the bank’s previous financial statements.
Credit Suisse said the SEC had subpoenaed it about earlier audits of consolidated cash flow statements for 2019 and 2020.
The bank said on Tuesday that it is working on a “remediation plan” and will implement “robust controls to ensure that all non-cash items are classified appropriately in the consolidated statement of cash flows.”
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