Credit Suisse loses 62 billion deposits in the first quarter of 2023 alone
Credit Suisse said on Monday that clients withdrew more than 61.2 billion francs (63 billion euros) in the first quarter and that outflows continue, highlighting the challenge UBS faced in bailing out its rival in March.
In its latest balance sheet as an independent company, Credit Suisse reported a loss of 1.3 billion Swiss francs (1.35 billion euros) for the first three months of the year. Credit Suisse said there were " significant net outflows of assets " in March. Most of the outflows originated from its wealth management unit and occurred in all regions where the bank operated. The troubled bank said: “ These outflows have moderated but have not yet reversed as of April 24, 2023. ” So the merger with UBS hasn't completely restored confidence in Swiss banks either.
Credit Suisse's wealth management unit lost 9% of assets in the first quarter. The institute said this will reduce the fees it generates and "likely lead to a substantial loss in asset management" in the second quarter.
The Swiss government last month mandated UBS's $3.25 billion takeover of Credit Suisse, with significant integration risks. Both banks could see a continued exodus of customers. High-net-worth investors began pulling money from scandal-plagued Credit Suisse well before the turmoil unleashed in the US regional banking sector in March. According to Bloomberg, more than 200 billion francs in customer deposits have flown out of the troubled bank in the past six months.
"The scale of the losses and outflows is alarming," analysts at Keefe, Bruyette & Woods wrote in a note to clients. The revenue trajectory is so damaged that the deal could remain a drag on UBS's operating results unless a more profound restructuring plan is announced.
Also, in the morning, Credit Suisse announced that it has closed a $175 million acquisition deal to buy the investment bank of Michael Klein (former bank director). The deal was to be a plan to spin off Credit Suisse's investment bank under the name First Boston, which Klein would manage.
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The article Credit Suisse loses 62 billion deposits in the first quarter of 2023 alone comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/credit-suisse-perde-62-miliardi-di-depositi-nel-solo-primo-trimestre-2023/ on Wed, 26 Apr 2023 08:00:24 +0000.