Credit Suisse said on Monday that 61 billion Swiss francs ($68 billion) of assets left the bank in the first quarter and capital outflows continued.
Client deposits decreased by CHF 67 billion in the quarter and the bank noted that many past due time deposits were not renewed.
“These outflows have moderated but have not yet reversed as of April 24, 2023,” Credit Suisse said, adding that most of the money that left the bank was accounted for by the wealth management division across all regions. the fourth quarter.
The 167-year-old bank reported results for what will likely be the last time, as a takeover by rival UBS is expected to close soon. Much of Switzerland’s reputation as a trusted global financial centre, especially for the ultra-wealthy, will depend on the successful integration of the two banks.
Shares of UBS and Credit Suisse were up about 2% in morning trading, with some analysts noting the outflows weren’t as severe as feared. But others said the magnitude was alarming.
Credit Suisse’s ability to generate revenue appears so hampered that “the acquisition could continue to drag UBS’s operating results unless a more profound restructuring plan is announced,” KBW London analyst Thomas Hallett said in a statement. a note to customers.
Assets under management at the leading wealth management division fell 29% to CHF 502.5 billion at the end of March compared to the same period last year.
The bank reported a pre-tax gain of CHF 12.8 billion, largely due to the controversial write-down of AT1 bonds and a gain from the sale of a large part of its Securitized Products Group to Apollo Global Management. Adjusted for these factors, Credit Suisse lost CHF 1.3 billion in the quarter.
UBS, which signaled it expects the Credit Suisse deal to deliver $8 billion in cost savings by 2027, reported first-quarter results on Tuesday.
(Noele Illien, John O’Donnell, Stefania Spezzati and Miranda Mu)
Source: Terra
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