2023-04-24 10:05:48
Credit Suisse on Monday announced further massive withdrawals of funds and a sham quarterly profit, showing the “urgency” of the restructuring that awaits UBS following the forced takeover of the bank in turmoil under pressure from the Swiss authorities .
“UBS undoubtedly faces a major (and urgent) task in the profound restructuring of its former competitor”, reacted to the reading of the figures Andreas Venditti, analyst at Vontobel, in a market note.
During the first quarter, capital outflows reached 61.2 billion Swiss francs (62.5 billion euros), the bank acknowledging in a press release “significant (…) outflows during the second half of March” which “have slowed down but not yet reversed”.
In a stock commentary, analysts at the Cantonal Bank of Zurich note the outflows “below what was feared”. In the fourth quarter, Credit Suisse had already suffered 110.5 billion francs in capital outflows.
These results, finally published on the eve of those of UBS, “reveal the poor state in which the firm is”, added Mr. Venditti.
Under pressure from the Swiss authorities, UBS agreed on March 19 to take over Credit Suisse for 3 billion Swiss francs to prevent it from sinking.
In the first quarter, the bank posted a sham net profit of 12.4 billion Swiss francs, the result of an accounting effect linked to the takeover by UBS.
To facilitate this takeover, the Swiss market surveillance authority, Finma, reduced the value of the so-called AT1 (Additional Tier 1) risky bonds to zero, put in place in the followingmath of the 2008 financial crisis to strengthen the bank capital.
This decision shocked the holders of this type of bond, which normally comes first in the order of reimbursement in the event of bankruptcy. Some have recently filed lawsuits once morest the regulator.
This net profit masks a pre-tax loss of 1.3 billion francs following adjustments, details Credit Suisse. He still expects a “substantial” loss in the second quarter as well as for the whole of 2023, both at group level and in his investment bank.
1682338708
#Credit #Suisse #quarterly #results #show #urgency #task #ahead #UBS
