Credit Suisse: Beleaguered lender posts £6.6bn loss for 2022 as it undergoes ‘radical’ restructuring to create ‘new’ bank
Credit Suisse slumped to a mammoth CHF7.3bn (£6.6bn) loss in 2022 as it posted yet another eye watering quarterly loss in the fourth quarter.
Revenue at the bank fell 33 per cent compared to the same period last year while its loss between October and December was CHF1.4bn.
The embattled Swiss lender had a “horrifying” 2022, facing scandals, talent outflows and even speculation that it might collapse in October. Its share price fell over 60 per cent.
As a result the bank announced radical restructuring plans in October to turn the ship around, including a CHF4bn capital raise and large scale job cuts.
CEO Ulrich Koerner said today “we have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation by reshaping our portfolio, reallocating capital, right-sizing our cost base, and building on our leading franchises.”
The scale of net outflows in the quarter however demonstrates the size of the challenge with CHF110.5m flowing out of Credit Suisse.
Around two thirds of the net outflows in the quarter were concentrated in October, when rumours abounded that the bank might collapse.
Credit Suisse said outflows “reduced substantially for the rest of the quarter”.
It aims to turn itself into a “new Credit Suisse”, centred around wealth management and its domestic bank.
The bank said performance for the remainder of 2023 will depend on our ability to execute on its strategy, the scale of asset flows and wider market conditions.
It pointed to a CET1 ratio of 14.1 per cent as evidence that it could undergo its restructuring from a position of “capital strength”.
Credit Suisse also announced today that it had acquired M. Klein & Company’s investment banking business for $175m (£144m).
It said the acquisition marked “another milestone in the carveout of CS First Boston” as an independent investment banking business.
Michael Klein has been appointed CEO of CS First Boston, reporting directly to group CEO Ulrich Koerner.
Koerner said: “This acquisition of The Klein Group is an exceptional opportunity for Credit Suisse to successfully deliver on its strategic objective to carve out CS First Boston as an independent global capital markets and competitive advisory led business.”
Credit Suisse announced the spin-off of CS First Boston as part of its restructuring plans last October.
Its investment banking business performed especially poorly in 2022, posting a pretax loss of $3.3bn for 2022, swung from a $3.5bn profit in 2021, reflecting “extremely challenging market conditions”. The newly spun-out business will concentrate on capital markets and advisory.