NEW YORK: Credit Suisse Group AG is taking more than US$1bil in writedowns and provisions for bad loans after the coronavirus, joining US banks in taking an upfront hit as the outbreak pummels economic activity across the globe.

The bank held back 568 million Swiss francs (US$585mil) for credit losses, almost triple what analysts had expected, and said it may have to make further allowances in future quarters. While trading results and overall profit were resilient, the bank is also taking 444 million francs in writedowns.

Switzerland’s second-largest lender is giving a window into how European lenders fared during an unprecedented and volatile quarter during which lockdowns hit corporate clients and whipsawed markets, with plenty of uncertainty still remaining over the duration of the crisis and the level of government assistance. US banks made a point of taking the pain upfront, with lenders such as JPMorgan Chase & Co and Wells Fargo & Co posting their highest provisions in at least a decade.

Chief executive officer Thomas Gottstein, a 20-year Credit Suisse veteran and the bank’s first Swiss chief in almost two decades, is facing an extraordinary turn of events since taking over just two months ago that may throw the bank’s best-laid plans into disarray. Still, he’ll take comfort from the performance of the key trading and wealth management business, even as the investment bank did worse than expected.

“In my first quarter as CEO of the group we all witnessed a highly challenging environment with a severe impact from the Covid-19, ” Gottstein said in the statement. “We delivered a resilient performance, while absorbing a significant reserve builld of over 1 billion francs.”

 - Bloomberg