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Credit Suisse postpones annual report after SEC call

Credit Suisse delayed the release of its annual report on Thursday following a call from the U.S. Securities and Exchange Commission the night before regarding cash flow statements dating back to 2019.

The bank said its 2022 financial statements — which it released last month — were unaffected and that the SEC’s feedback was technical, without providing more information.

“Management believes it is prudent to briefly delay the publication of its accounts in order to more thoroughly understand the comments received,” the bank said.

Shares in Credit Suisse fell 4 percent following Thursday morning’s news. They reached a record low of SFr2.52 last week.

The report’s delay comes at a sensitive time for the group, which last month announced its second consecutive annual loss and said it expected another loss in 2023.

Clients have withdrawn more than SFr 100 billion ($106 billion) in assets from the bank in recent months, while longtime investors – including former top shareholder Harris Associates – have sold their holdings.

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The SEC’s comments address accounting issues that Credit Suisse identified in its 2021 annual report regarding the settlement treatment of some securities lending and borrowing activities. As a result, balance sheet and cash flow positions were undervalued.

The bank has revised its total assets and liabilities for 2020 by SFr 13 billion, which corresponds to 1.7 percent of its total assets, which meant that the statement of cash flows was adjusted by SFr 70 million.

Credit Suisse also made changes to the statement of cash flows for share-based compensation, non-cash currency movements and some cash flow hedges.

The bank said Thursday that the SEC’s comments also covered bank-related checks of cash flow statements.

A person with knowledge of the bank’s discussions with the SEC said the regulator had previously raised questions about its cash flow statements, to which Credit Suisse had responded.

They added that the bank hoped to publish the annual report as soon as possible, but wanted to make sure it had responded to the SEC first.

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Anke Reingen, analyst at RBC, said: “We have generally not focused on cash flow statements; the amounts are relatively small and the adjustment was previously announced.

“However, questions related to accounting, especially from the SEC, are negative, especially as the Credit Suisse press release references SEC questions related to audits related to the revisions.”

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