Credit Suisse: Final results reveal impact of crisis as bank haemorrhages over £55bn assets, and counting
In the quarter in which it was taken over by rival UBS, Credit Suisse reported outflows of CHF61.2bn (£55.3bn) with clients and customers pulling funds as fear over the stability of the ailing lender grew.
These “significant” outflows were concentrated in the second half of March, the bank said, and while they have “moderated”, they have not yet reversed.
Deposit outflows represented 57 per cent of net asset outflows from Credit Suisse’s Swiss Bank and Wealth Management business.
Asset outflows in the first quarter represented nine per cent of assets under management in the Wealth Management division. This is expected to lead to a “substantial loss” in the division in subsequent quarters.
Across the group, assets under management fell by CHF41bn compared to the end of 2022.
Credit Suisse confirmed it had terminated the $175m acquisition of Michael Klein’s boutique investment bank, an acquisition which was part of a wider strategy to carve out the division that had caused Credit Suisse lots of problems over the previous years.
In a sign of the scale of the challenge facing UBS, Credit Suisse said it also expects the investment bank and wider group to report a “substantial loss” in the second quarter and 2023.
The bank said its results were “mainly impacted by actions leading up to and stemming from the planned merger”.
On a reported basis, Credit Suisse’s profit and revenue soared compared to last year, but this was a result of the gains the bank made from the controversial writedown of its AT1 bonds.
The Swiss regulator is facing a lawsuit over its decision to write off $17bn of Credit Suisse’s convertible bonds. Ordinarily, bondholders would receive compensation in priority to shareholders.
Excluding the impact of the writeoff, it slumped to a CHF1.3bn quarterly loss, swung from a CHF300m profit the year before as revenue plummeted 40 per cent.
The results are expected to be Credit Suisse’s last as an independent entity after it was bought by UBS in a government brokered deal for $3.25bn.
“Credit Suisse will work closely with UBS to ensure that the transaction is completed in a timely manner. The consummation of the merger remains subject to customary closing conditions,” it said.