2023-04-24 09:13:44
Credit Suisse once more suffered money ebbs in the first three months of 2023. They reached 61.2 billion francs, the Zurich bank said on Monday in the last interim report in its history, before its takeover by UBS.
Net asset outflows have been significant, particularly during the second half of March 2023. “These capital outflows have slowed but not yet reversed as of April 24, 2023,” the bank wrote in a statement. Deposit outflows accounted for 57% of net asset outflows in Wealth Management and Domestic Banking activities.
Over the whole of the fourth quarter, capital outflows had risen to 110.5 billion.
Over the first three months, wealth management suffered outflows of 47.1 billion, caused by outflows in all regions, while 6.9 billion disappeared from Swiss Bank, mainly due to capital outflows in the business with private clients.
At the end of the first partial, assets under management reached 1252.6 billion. At the end of 2022, the two-veiled establishment had assets under management of some 1,290 billion francs, those of its future buyer UBS then amounting to 3,960 billion.
As expected, the establishment once more suffered a heavy loss, adjusted for various factors, of 1.32 billion francs, while the range of expectations was between 700 million and 1 billion francs. Unadjusted, the establishment posted a pre-tax profit of 12.8 billion francs, due to the depreciation of 15 billion francs wiped out on the AT1 capital instruments.
Reported pre-tax profit was impacted by a gain of $0.7 billion from the sale of a significant share of Securitized Products Group (SPG) to Apollo, offset by a goodwill impairment charge of $1.3 billion , almost entirely accounted for in the wealth management division, as well as restructuring costs of 0.3 billion.
Provisions for credit losses reached 83 million, following 41 million at the last partial and 45 million a year earlier.
The core capital ratio (CET1) stood at 20.3%, compared to 14.1% in the last quarter of 2022. Excluding AT1 depreciation, it reached 14.3%.
The various units experienced varying fortunes over the first three months of the year. Wealth management, investment banking, asset management and defeasance unit (CRU) suffered pre-tax losses, while domestic banking remained profitable.
Expected loss for 2023
For the second part, as for the whole year, Credit Suisse, table on a heavy loss before tax, not only in the investment bank, but for the whole group. The discontinuation of activities will indeed have an impact, as will restructuring costs and financing charges.
A range of factors will influence performance, including business developments in the Wealth Management and Investment Banking divisions, net asset outflows, goodwill and other impairments, as well as litigation, regulatory actions and the available to the SNB’s liquidity facilities. The impact of the continued voluntary and involuntary departures of employees is also a factor of uncertainty, while the workforce has decreased by 9% since the third part of 2022.
Credit Suisse also announced progress in the cost transformation program with adjusted operating expenses down 6% year-on-year in the first quarter, due to lower general and administrative expenses as well as compensation and benefits.
This article has been published automatically. Source: ats/awp
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