Credit Suisse will record another loss in the fourth quarter. It was expected, but the amounts could reach some 1.5 billion francs, warned the bank Wednesday morning in a press release, published a few hours before an extraordinary general meeting which must in particular validate a controversial capital increase.
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Already at the end of October, the bank had warned that the economic environment and the difficulties in the markets were having an impact on the activity of customers in all divisions. This Wednesday, she cites in particular the investment bank, affected by the slowdown in activity in the capital markets. For wealth management and Swiss banking, client activity was also “moderate”. Both divisions are expected to post losses. The bank expects “these market conditions to continue over the coming months.” At the opening of the stock market, the action of Credit Suisse lost more than 4%.
More loyal Swiss customers
Above all, the bank gives information on the exodus of customers. “Credit Suisse began to experience net cash outflows in the first two weeks of October, at a substantially higher level than in the third quarter,” the statement details. He specifies that at group level, exits represent 6% of assets under management at the end of the third quarter. In wealth management, withdrawals have declined since the high levels of the first two weeks of October, but they have not stopped and amount to some 10% of assets under management. That is an amount of approximately 63 billion francs. In a note, Vontobel analyst Andreas Venditti called the outflows “massive” and “highly concerning, especially as the trend has yet to turn”. Credit Suisse “must restore confidence, but that’s easier said than done,” he adds.
In the Swiss bank, the situation stabilized and assets under management fell by 1%. The departure of these customers will also have an impact on the bank’s income, as will the abandonment of certain activities of the establishment. Hence the anticipated loss for the last quarter.
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