Business & Economy

Credit Suisse lost $68 billion in assets last quarter before rescue

Geneva, Apr 24 (EFE).- Credit Suisse, which was recently acquired by its domestic rival UBS, said it lost 61 billion Swiss francs ($68 billion) in assets in the first quarter of 2023, as the bank continues to observe outflows, the Swiss lender reported on Monday.

The massive outflows peaked in March as clients and depositors pulled billions from the lender after its largest shareholder, the Saudi National Bank, said it would not be pumping any more funds into the embattled bank.

“These outflows, which were most acute in the days immediately preceding and following the announcement of the merger, stabilized to much lower levels, but had not yet reversed as of April 24, 2023,” Credit Suisse said in a statement.

Before the March acquisition by arch-rival UBS, Credit Suisse had reported losses of 123.2 billion Swiss francs last year.

Credit Suisse, which still operates as an independent entity until its merger is complete, posted a net income of 12.4 billion Swiss francs in its first quarter results.

The Swiss lender was able to reverse years of losses, after it had reported one of its worst annual losses in 2022 at 7.293 million Swiss francs, thanks to the forced write-down of AT1 (Additional Tier 1 capital) bonds which was a condition of Swiss financial authorities ahead of the emergency bailout.

The Swiss Financial Market Supervisory Authority’s controversial decision to write-down bonds worth around 16 billion Swiss Francs has prompted several bondholders to file complaints against the Swiss authorities over vast losses.

According to the report published Monday the sale of most of Credit Suisse’s securitized products to New York-based Apollo Global Management, in an attempt to restructure the lender’s investment bank in February, also contributed to the gains in the last quarter.

The bank’s total assets for the January-March period stood at 540,291 million francs, 27% less than the previous year, the report added.

Credit Suisse said that it would “work closely with UBS to ensure that the transaction is completed in a timely manner.”

“The consummation of the merger remains subject to customary closing conditions,” and could take months, the lender said. EFE


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