Credit Suisse on Tuesday said its net asset outflows had declined but "not yet reversed" and announced that "material weaknesses" were identified in its financial reporting processes for 2022 and 2021.

The embattled Swiss lender published the annual report scheduled for last Thursday, which was delayed by a late call from the U.S. Securities and Exchange Commission (SEC).

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That conversation related to a "technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls."

In the Tuesday annual report, Credit Suisse revealed that it had identified "certain material weaknesses in our internal control over financial reporting" for the years 2021 and 2022.

These issues related to a "failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements" and various flaws in internal control and communication.

Despite this, the bank said that it was able to confirm that its financial statements over the years in question "fairly present, in all material respects, [its] consolidated financial condition."

Credit Suisse confirmed its 2022 results announced Feb. 9, which showed a full-year net loss of 7.3 billion Swiss francs ($8 billion).

Liquidity risk

In late 2022 the bank disclosed that it was seeing "significantly higher withdrawals of cash deposits, non-renewal of maturing time deposits and net asset outflows at levels that substantially exceeded the rates incurred in the third quarter of 2022."

Credit Suisse saw customer withdrawals of more than 110 billion Swiss francs in the fourth quarter, as a string of scandals, legacy risk and compliance failures continued to plague it.

"These outflows stabilized to much lower levels but had not yet reversed as of the date of this report. These outflows led us to partially utilize liquidity buffers at the Group and legal entity level, and we fell below certain legal entity-level regulatory requirements."

Credit Suisse acknowledged that these circumstances have "exacerbated and may continue to exacerbate" liquidity risks. The reduction in assets under management is expected to result in reduced net interest income and recurring commissions and fees, in turn affecting the bank's capital position objectives.

"A failure to reverse these outflows and to restore our assets under management and deposits could have a material adverse effect on our results of operations and financial condition," the report said.

Credit Suisse reiterated that it has taken "decisive action" on legacy issues as part of its ongoing massive strategic overhaul, which is expected to result in a further "substantial" financial loss in 2023.

The bank's board collectively forewent a bonus for the first time in more than 15 years, the annual report confirmed, while taking home a combined fixed compensation of 32.2 million Swiss francs.