A “lackadaisical” attitude towards risk and “a lack of accountability” were to blame for Credit Suisse’s (CSGN.S) $5.5 billion loss on investment fund Archegos, according to a review published on Thursday, as the bank reported a near-80% fall in second quarter profit.
Net profit of 253 million Swiss francs ($278.45 million) missed average forecasts for 334 million Swiss francs in the bank’s own poll of 18 analysts.
“Credit Suisse delivered resilient underlying second quarter results and strong capital ratios as we are benefiting from having taken decisive actions to address the challenges raised by the Archegos and Supply Chain Finance Funds matters. We take these two events very seriously and we are determined to learn all the right lessons,” Chief Executive Thomas Gottstein said in a statement.
Analysts had expected a nearly $600 million hole caused by more losses at stricken fund Archegos and further weakness in the bank’s trading and advisory businesses to bring second-quarter net profit down to a quarter of its value a year ago.
Excluding Archegos and other significant items, Credit Suisse said pre-tax income would have dropped 11%.