Credit Suisse suffers biggest losses since 2008 financial crisis

The screen shows a speech by the CEO of the Swiss bank Credit Suisse, Ulrich Körner - MICHAEL BUCHOLZER/EPA-EFE/Shutterstock

The screen shows a speech by the CEO of the Swiss bank Credit Suisse, Ulrich Körner – MICHAEL BUCHOLZER/EPA-EFE/Shutterstock

Credit Suisse suffered its biggest annual loss since the 2008 financial crisis and cut bonuses for its top executives as the scandal-hit lender embarks on sweeping changes.

The Swiss bank said customers withdrew a record amount in the last three months of last year as it posted a net loss of CHF1.39bn (£1.3bn) for the quarter. During the contusion period, total losses for 2022 amounted to 7.3 billion Swiss francs.

The country’s second-biggest lender is still struggling to recover from a spate of withdrawals in September and October after a social media storm sparked questions about its financial condition. Total capital outflows for the quarter reached a whopping 110.5 billion francs, according to the bank.

Credit Suisse has been through crisis after crisis in recent years, suffering from a series of costly setbacks that have sent its share price down more than 60% over the past year.

In October, Ulrich Körner, the bank’s new chief executive, unveiled a three-year reorganization plan that would see the 166-year-old lender cut some 9,000 jobs, shift its focus from investment banking to wealth management for its wealthy clients, and take 1.5 billion Swiss francs of investment from the largest bank in Saudi Arabia.

However, continued losses and outflows highlight the need for the bank’s new management to take control of reforms as investors and analysts show limited patience. Shares fell another 5% in early trading on Thursday.

While Axel Lehmann, the bank’s chairman, sought to stem customer churn, the loss of assets will see the bank’s key asset management division continue to lose cash in the first quarter of this year.

The bank said none of its executives, including Mr Koerner, would receive bonuses for poor performance.

But executives and about 500 senior managers are reportedly due to share a CHF 350 million payment following the successful implementation of the restructuring plan.

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

The lender suffered a double whammy in 2021 following the collapse of supply chain finance group Greensill Capital and family office Archegos. The scandals, which caused a long period of crisis for the bank, resulted in a $10bn (£8bn) freeze on its clients’ assets and $5.5bn in trading losses.

Mr Koerner said: “2022 has been a pivotal year for Credit Suisse. We have announced our strategic plan to create a simpler, more focused, customer-focused bank, and we have been executing it at a pace since October.”

“We have a clear plan to build a new Credit Suisse and we intend to continue our three-year strategic transformation by restructuring our portfolio, reallocating capital, streamlining our cost base and building on our flagship franchises.”

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