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Tuesday, November 28, 2023

Credit Suisse – financial results and data for the first quarter of 2023

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Credit Suisse said it had an asset outflow of 61 billion Swiss francs ($68 billion) in the first quarter of 2023, and this is a permanent outflow. This shows how great a challenge UBS Group is facing, which decided to save its rival, Reuters reported.

Customer deposits fell by CHF 67 billion in the first quarter. The bank added that many term deposits had not been renewed, Reuters pointed out.

“These outflows have weakened, but the trend has not yet reversed,” Credit Suisse said. He added that most of the money leaving the bank came from the wealth management department and took place in all regions.

Reuters reminded that in the fourth quarter of 2022, 110.5 billion francs were withdrawn by customers.

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Situation at Credit Suisse

The 167-year-old bank reported the results and this will likely be the last time it happens as its state-owned marriage with UBS is expected to end soon. Much of the reputation Switzerland as a trusted global financial center – especially for the ultra-rich – will depend on whether two systemic banks of global importance can be integrated, Reuters told Reuters.

She added that shares of both UBS and Credit Suisse were up about 2 percent. in morning trading, with some analysts saying the outflows were not as bad as feared. Others, however, said the scale was alarming, Reuters reported.

Credit Suisse’s ability to generate revenue appears so weak that “the deal could continue to negatively impact UBS’s operating results unless a deeper restructuring plan is announced,” London-based KBW analyst Thomas Hallett said in a note to clients.

Customers quickly began pulling money out of scandal-ridden Credit Suisse after it fell into market turmoil triggered by the collapse of US lenders Silicon Valley Bank and Signature Bank, Reuters reported.

UBS acquires Credit Suisse

In a rescue package jointly prepared by the Swiss authorities, UBS agreed to acquire Credit Suisse for 3 billion francs in shares and assume up to 5 billion francs in losses. The deal also includes 200 billion francs in state financial guarantees.

The wealth management and investment banking units will continue to be loss-making in the second quarter, Credit Suisse said.

UBS expects the deal to deliver $8 billion in cost savings by 2027.

Reuters reported that Credit Suisse’s operating costs increased by 30 percent. compared to the previous quarter, which, according to the bank, was largely due to a goodwill impairment charge and an increase in salaries and benefits

The agency added that at the end of the first quarter of 2023, the bank employed just over 48,000 full-time employees, which is a decrease of 5%. compared to the end of December 2022.

Main photo source: O_P_G / Shutterstock.com

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