Credit Suisse swung to a fourth-quarter loss of SFr353m ($393m) as credit writedowns and provisions for litigation eroded modest gains in underlying performance at the bank.

Write-offs related to underperforming loans and defaults tripled to an 11-year high, the bank said on Thursday, reaching SFr1.1bn. This was driven by the economic fallout from the coronavirus pandemic.

The results mean Credit Suisse’s net income for 2020 was down 22 per cent year on year to SFr2.7bn, with revenues flat at SFr22.4bn.

During the last three months of the year, the bank also booked a loss of SFr414m related to its ownership of hedge fund York Capital Management and SFr757m in litigation costs. Credit Suisse had previously disclosed both hits to profits.

The numbers are nevertheless comfortably ahead of analysts’ expectations, which had a consensus forecast for a SFr566m loss in the fourth quarter leading to a net income of just SFr2.45bn for the year.

“Despite a challenging environment for societies and economies in 2020, we saw a strong underlying performance across wealth management and investment banking, while addressing historic issues,” said chief executive Thomas Gottstein.

Hits to the bank’s profits in recent months and embarrassing legal cases have been an early hindrance for Gottstein, who took the helm of the Swiss lender last February.

Gottstein told the Financial Times in December he hoped Credit Suisse could start 2021 with a “clean slate”.

The bank said that despite the fall in profits for 2020, it would push ahead with plans to return capital to shareholders, and had begun its 2021 share buyback programme, under which it would return SFr1.5bn to shareholders over the year.

Credit Suisse said it was also on track to meet its aim of increasing its annual dividend by 5 per cent a year.

In its core international wealth management division — which caters to wealthy clients — underlying revenues, excluding exceptional charges and foreign currency fluctuations, were down 10 per cent year on year at SFr4.9bn. Underlying income in the division dropped 30 per cent to SFr1.18bn.

In its investment banking arm, Credit Suisse reported stronger performance, with underlying revenues up 18 per cent to SFr9.7bn, and income up 70 per cent to SFr1.88bn.

Underlying revenues at its Swiss retail banking division were flat, with a modest decline in income. In its Asia Pacific division, underlying revenues rose slightly over the year by 5 per cent, but profits fell 7 per cent.

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