Credit Suisse suffers worst loss since 2008 as anxious clients fled
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Scandal-prone Credit Suisse suffers biggest loss since 2008 financial crisis when fearful customers fled
Scandal-ridden bank Credit Suisse posted its biggest annual loss since the 2008 financial crisis as fearful customers fled.
The lender posted a loss of £6.5bn for 2022 – its second year in a row in the red – and warned of another major shortfall in 2023.
It saw a sharp acceleration in customer withdrawals, with £100bn outflows in the fourth quarter alone, although the bank said the picture was improving.
In the red: Credit Suisse posted a £6.5bn loss for 2022 and warned of another major deficit in 2023
The scale was described as “staggering” by Thomas Hallett, an analyst at Keefe, Bruyette & Woods.
He said: “With heavy losses in 2023, we expect another wave of downgrades and see no reason to own the stock.”
The bank said: “Our 2022 financial results were significantly impacted by the challenging macro and geopolitical environment with market uncertainty and risk aversion from clients. Credit Suisse also expects the group to report a substantial pre-tax loss in 2023.”
The stock fell 15 percent yesterday.
Vontobel analyst Andreas Venditti said 2022 was one of the worst years in Credit Suisse’s 167-year history.
Ethos Foundation, which represents Swiss pension funds that own shares in the bank, called the results “catastrophic.”
Credit Suisse has faced a series of scandals in recent years, including multibillion-pound hits related to the collapses of US investment firm Archegos and UK supply chain finance firm Greensill Capital.
It was convicted in a money laundering case in Switzerland and late last year a wave of speculation about its financial health rocked confidence.
Much of the bank’s outflow happened around that time.
The asset management division accounted for the majority of funds withdrawn, with £83 billion raised in the fourth quarter.
The investment bank suffered a loss of £3.4bn this year, about the same amount it paid to its staff.
The overall performance was primarily due to “significantly lower” earnings in the investment banking division amid an “industry-wide slowdown in capital markets,” it claimed.
The group, Switzerland’s second largest lender, is slashing costs and jobs to revive its fortunes.
It completed a £3.6 billion fundraising effort in December, with Saudi National Bank, which has a stake of around 10 percent, a major investor.
The shake-up includes divesting its investment bank under the CS First Boston brand.
Chief executive Ulrich Koerner said: “We have a clear plan to create a new Credit Suisse and intend to continue our three-year strategic transformation.”
He said it had done “cautious and hopefully somewhat careful planning.”
Credit Suisse has scrapped its annual bonuses for top executives, including the CEO.
And it reduced the bank’s total bonus pool by 50 percent compared to last year.