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Credit Suisse reported 61.2 billion francs ($69 billion) of outflows in the first quarter that ended its 167-year history as Switzerland’s second largest lender and forced a shotgun wedding with rival UBS.
In its regulatory filing on Monday, Credit Suisse said it had net asset outflows of 47.1 billion Swiss francs ($52 billion) at its wealth management division in the three-month period to the end of March, which was driven by outflows across all regions.
Deposit outflows represented 57 per cent of its wealth management unit and Swiss Bank net asset outflows in the first quarter of this year.
The outflows “have moderated but have not yet reversed” as of April 24, 2023, it said.
Credit Suisse, which had already lost about 110bn francs of assets in the fourth quarter of last year, said net income attributable to shareholders was 12.43 billion francs in the first quarter compared to a 273 million net loss in the same period a year earlier and a net loss of 1.39 billion francs in the last three months of 2022.
“In light of the merger announcement, the adverse revenue impact from the previously disclosed exit from non-core businesses and exposures, restructuring charges and funding costs, Credit Suisse would also expect the investment bank and the group to report a substantial loss before taxes in the second quarter of 2023 and 2023,” it said.
Last month, Swiss regulators jumped in to ring-fence Credit Suisse by paving the way for it be absorbed by UBS, amid a crisis of confidence in banking.
The Swiss National Bank agreed to lend UBS up to 100 billion Swiss francs to help it take over Credit Suisse, while Swiss regulator Finma erased $17 billion worth of Credit Suisse’s bonds and scrapped the need for shareholders to vote on the agreement.
Under the terms of the merger agreement all shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse.
UBS estimates that the combined invested assets will total $5 trillion, with the merged lender being double the size of Switzerland’s economy.
In its statement on Monday, Credit Suisse said it and Michael Klein have mutually agreed to terminate the $175 million acquisition of The Klein Group, the investment banking business of Michael Klein, by Credit Suisse in light of the merger with UBS.
Updated: April 24, 2023, 6:04 AM
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