authored by Noele Illien
According to ZURICH( Reuters)- Credit Suisse, 61 billion European euros($ 68 billion ) in property left the bank in the first quarter and that flows were still occurring, underscoring the difficulty UBS Group faced in saving its competitor.
The lender noted that most matured day deposits had not been renewed as customer deposits decreased by 67 billion francs during the quarter.
According to Credit Suisse, the majority of the capital leaving the lender came from its wealth management division and happened across all provinces." These flows have moderated but have not yet reversed as of April 24, 2023." The net plus spring came after clients withdrew 110.5 billion francs from the lender in the fourth quarter.
The 167-year-old banks released results for what is probably the last time because it is anticipated that its state-engineered merger with UBS will soon be finished. Whether the two critically important structural businesses in the world can be successfully integrated will have a significant impact on Switzerland's's recognition as an dependable global financial center, especially for the ultra wealthy.
Shares of UBS and Credit Suisse were up about 2 % in day trading, and some researchers noted that the flows were not as bad as anticipated.
People, however, claimed that the size was concerning.
According to a note to clients from London-based analyst Thomas Hallett at KBW, Credit Suisse's's ability to generate income appeared to be so severely damaged that" the price could very well continue to drag on UBS operating outcome unless further reform plans are announced."
At the end of March, goods under the flagship wealth management division's's control fell 29 % to 502.5 billion euros from the same time next year.
After Credit Suisse became embroiled in market turmoil brought on by the failure of U.S. lenders Silicon Valley Bank and Signature Bank ( OTCSBNY ), clients quickly began withdrawing money from the scandal-ridden company.
UBS consented to have over Credit Suisse for 3 billion euros in store and expect up to 5 billion in losses as part of the rescue package rushed up by European authorities. Additionally, the agreement includes 200 billion euros in state commercial assurances.
After paying back 60 billion, Credit Suisse reported that it had 108 billion European francs in gross debts from the central bank at the end of the first quarter. It has since paid back an additional$ 10 billion.
However, the bank reported a pre-tax profit of 12.8 billion francs, largely attributable to the contentious writedown to zero of AT1 bonds and the profit from the sale of much of its Securitized Products Group to Apollo Global Management ( NYSEAPO ). It lost 1.3 billion euros for the third after accounting for these characteristics.
According to Credit Suisse, the wealth management and investment bank units will continue to make losses in the second quarter. The company is also anticipated to report losses this year.
UBS reports first-quarter earnings on Tuesday and has stated that it anticipates the agreement will result in cost reductions of$ 8 billion by 2027. It announced on Monday that Christian Bluhm, whose departure had already been made public, would remain in charge of risk management for the" near proposed" to work on the acquisition.
Other important details from Credit Suisse's's Monday issuing include
Operating costs increased by 30 % from the prior quarter, which the lender claimed was partly attributable to an increase in remuneration and benefits and a kindness impairment charge.
- In the midst of concerns about the future of the Credit Suisse division in Switzerland, corporate clients withdrew 6.9 billion euros from the bank's's European arm.
- A mutual understanding prevented Credit Suisse from acquiring Michael Klein's's investment banks company for$ 175 million.
At the end of the first quarter, the institution had really over 48, 000 full-time workers, a 5 % decrease from end-December.
( 1. 8920 Swiss francs )
Asset losses for Credit Suisse's's tail were$ 68 billion, and withdrawals are still occurring.
