A record US tax fine has resulted in a major loss for Credit Suisse in the second quarter, the Swiss lender said on Tuesday in Zurich.
Switzerland’s second biggest bank made a loss of 700 million Swiss francs ($779 million), the biggest since the 2008 financial crisis.
The bank had reported a profit of 1.05 billion francs in the second quarter of 2013.
Credit Suisse shares lost 2.53 per cent at the Zurich stock exchange on Tuesday morning.
The bank settled its tax row with US authorities in May, which included the admission that Credit Suisse had helped US citizens hide taxable income abroad. The resulting fine of $2.6 billion was the highest ever imposed on a company in a US tax case.
“I want to reiterate that we deeply regret the past misconduct that led to this settlement and that we take full responsibility for it,” Chief Executive Brady Dougan said in a statement. “The continued trust and support of our clients helped us mitigate the impact of the settlement on our business.”
The bank took a charge of 1.6 billion Swiss francs ($1.78 billion) as part of its settlement over the U.S. tax evasion charges.
The fine also decreased the bank’s capital buffer, which is now one of the lowest among major international lenders.
In order to increase that buffer, Credit Suisse said it would close its capital-intensive commodity trading operations, following similar steps by US bank JPMorgan and Germany’s Deutsche Bank.
Credit Suisse also said it had trimmed its worldwide staff to 45,100 by the second quarter from 46,300 a year earlier, and has already cut costs by 3.4 billion francs out of a total 4.5 billion francs it plans to cut by the end of next year.
Credit Suisse’s wealth management branch attracted 10.1 billion francs of client money in the second quarter.
A strong inflow of funds at the bank’s Asian and Swiss branches outweighed money that was repatriated from Switzerland to Western Europe as clients settled their taxes.
