ZURICH: Credit Suisse released its delayed annual report on Tuesday in which it identified “material weaknesses” in its internal controls over financial reporting and said it had not yet stemmed customer outflows.

“As of December 31, 2022, the Group’s internal control over financial reporting was not effective, and for the same reasons, management has reassessed and has reached the same conclusion regarding December 31, 2021,” it said.

Auditors PwC in the report included an adverse opinion on the effectiveness of the bank’s internal controls.

Outflows

Battered by a string of scandals, its customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion), putting it in breach of some liquidity buffers.

CEO Ulrich Koerner at the World Economic Forum in Davos, Switzerland, in January had said the bank was seeing money “coming back in different parts of the firm”.

On Tuesday the bank said “outflows (had) stabilised to much lower levels but had not yet reversed”.

Scheduled for release last week, the annual report had been delayed following a request from the US Securities and Exchange Commission (SEC), which had raised questions about the bank’s earlier financial statements.

Last week Credit Suisse said the SEC had called it regarding about previous revisions to consolidated cash flow statements for 2019 and 2020.

On Monday the bank’s share price fell more than 14% to a record low amid market turmoil triggered by the collapse of US lenders Silicon Valley Bank and Signature Bank.

Credit Suisse shares sink 14% to new record low

The cost of insuring against a Credit Suisse debt default also rose to a new all-time high at 466 bps, up 49 bps from Friday’s close.

On Monday Swiss regulator FINMA warned it was seeking to identify any potential contagion risks for the country’s banks and insurers following the collapses of the US banks.

“The aim is to identify any cluster risks and potential for contagion at an early stage.” it said.