ZURICH (dpa-AFX) - Shares of Credit Suisse Group AG (CS) were losing in Swiss trading as well as in pre-market activity on the NYSE after the banking major Wednesday said it expects to report a loss in its first quarter with increased legal provisions and reserves.
In the sequential fourth quarter, the company had recorded a sharply wider net loss with charges and weak revenues, mainly in the Investment Bank.
In its statement, the Swiss lender said its first-quarter earnings will be negatively impacted by a decision to increase litigation provisions relating to developments in a number of previously disclosed legal matters, all of which originated more than a decade ago, by around 600 million Swiss Francs. This will result in total litigation provisions for the quarter of around 700 million francs.
Further, with regard to the bank's exposure to the impact of Russia's invasion of Ukraine, results will be adversely affected by an aggregate of around 200 million francs of negative revenues and provisions for credit losses.
As announced earlier, first-quarter results will also include around 350 million francs of losses relating to the decrease in the value of its 8.6% holding in the publicly listed Allfunds Group. Its underlying results have been adversely impacted by a reduction in capital market issuances and by lower business activity.
However, these losses will be partially offset by a recovery in provisions of approximately 170 million francs in respect of claims against Archegos and by real estate gains of approximately 160 million francs.
The company plans to announce its first-quarter earnings on April 27.
In Switzerland, Credit Suisse shares were trading at 7.18 francs, down 1.4 percent.
In pre-market activity on the NYSE, the shares were losing around 2 percent to trade at $7.57.
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