Credit Suisse suffers worst loss since 2008 financial crisis

Screens show Swiss bank Credit Suisse CEO Ulrich Koerner presenting - MICHAEL BUHOLZER/EPA-EFE/Shutterstock

Screens show Swiss bank Credit Suisse CEO Ulrich Koerner presenting – MICHAEL BUHOLZER/EPA-EFE/Shutterstock

Credit Suisse suffered its biggest annual loss since the 2008 financial crisis and scrapped bonuses for its top executives as the scandal-hit lender embarks on a drastic overhaul.

The Swiss bank said customers withdrew a record amount of funds in the final three months of last year, as it posted a net loss of 1.39bn Swiss francs (£1.3bn) during the quarter. The bout of bruising brought his total loss for 2022 to 7.3 billion Swiss francs.

The country’s second-largest lender is still struggling to recover from a surge in lenders in September and October after a social media storm raised questions about its financial health. Total outflows for the quarter reached a whopping CHF110.5 billion, the bank said.

Credit Suisse has gone from crisis to crisis in recent years, suffering a series of costly setbacks that have sent its share price down more than 60% in the last year.

In October, Ulrich Körner, the bank’s new chief executive, unveiled a three-year recovery plan, which will see the 166-year-old lender cut around 9,000 jobs, shifting its focus from investment banking to managing the wealth of its wealthy customers and take a 1.5 billion Swiss franc investment from Saudi Arabia’s largest bank.

Still, continued losses and outflows underscore the urgency for the bank’s new management team to handle reforms with investors and analysts showing limited patience. Shares fell another 5% in early trading on Thursday.

While Axel Lehmann, the bank’s chairman, has sought to stem the customer exodus, the loss of business will see the bank’s key wealth management unit continue to hemorrhage cash in the first quarter of this year.

The bank said none of its executives, including Mr Körner, will receive bonuses as a result of the poor performance.

But executives and about 500 senior executives will reportedly share a payment of 350 million Swiss francs if its restructuring plan is successfully implemented.

As part of the review, Credit Suisse’s investment bank will be spun off as CS First Boston, which will be led by veteran banker Michael Klein and focus on advisory businesses such as mergers and acquisitions and capital markets deals.

The lender took two hits in 2021 following the collapse of supply chain finance group Greensill Capital and family office Archegos. The scandals, which triggered a prolonged bout of crisis for the bank, resulted in a $10bn (£8bn) freezing of its clients’ assets and a $5.5bn trading loss.

Körner said: “2022 was a pivotal year for Credit Suisse. We announced our strategic plan to create a simpler, more focused bank built around customer needs and we’ve been moving forward at a rapid pace since October.”

“We have a clear plan to create a new Credit Suisse and intend to continue delivering on our three-year strategic transformation by reshaping our portfolio, reallocating capital, right-sizing our cost base and building on our core franchises.”

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