As Zurich-based lender Credit Suisse is dealing with problems on multiple fronts, Twitter users said the bank should have concentred on the existing issues rather than "finding fault" with the embattled Adani Group.
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.
In February, private banking arm of Credit Suisse AG has stopped accepting bonds of some of the group entities of Adani Group -- Adani Ports & SEZ, Adani Green Energy, and Adani Electricity Mumbai – as collateral for margin loans amid Hindenburg row.
Seven listed Adani Group companies lost over $100 billion in market value combined after a US short seller Hindenburg Research alleged stock manipulation and improper use of tax havens, and flagged concerns over debt levels. Adani has rejected the concerns and denied any wrongdoing.
Twitter users in India felt schadenfreude after seeing the Swiss banking major's multiple problems.
"CreditSuisse gave long sermons on #Adani & #IndiaEconomy Risks. Today, Credit Suisse Default Swaps Hit Record. Lesson - Never bet against India," said a Twitter user.
"A bank which downgraded the bonds of #adani is in the verge of collapse . Irony is that they identified material weakness in their reporting for the past two years..#CreditSuisse Suisse should learn to clean their house before poking nose at us…#nifty50 #banknifty," said another Twitter user.
"Did #CreditSuisse just detonate. They should have concentrated more on themselves than finding fault with Adani bonds," quipped another Twitter user.
Credit Suisse's 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 U.S. lenders Silicon Valley Bank and Signature Bank.
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.
Struggling to recover from a string of scandals, Switzerland's second-biggest bank has begun a major overhaul of its business, cutting costs and jobs and creating a separate business for its investment bank under the CS First Boston brand.
In 2021, Credit Suisse suffered a multi-billion dollar hit linked to Archegos Capital Management, the family office linked to investor Bill Hwang.
Credit Suisse has been dogged by outflows of client cash since the last quarter of 2022, when more than 110 billion francs was pulled. The bank said Tuesday that withdrawals had continued into this month, even after it started a huge campaign to win back client confidence.
With inputs from Reuters
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