Credit Suisse will make its highest loss in 14 years in 2022


The Swiss bank has made a significant loss because of its corporate restructuring.

(Photo: Reuters)

Zurich In 2022, the major Swiss bank Credit Suisse, which was plagued by the crisis, had its worst result since the financial crisis. Depreciation in connection with the ongoing corporate restructuring and the drop in earnings at the investment bank were mainly responsible for a loss of CHF 7.29 billion, as Credit Suisse announced on Thursday.

That was in line with the expectations of the analysts, who, according to a survey conducted by the institute itself, had expected an average deficit of CHF 7.2 billion. In 2008, Credit Suisse lost more than 2022, at CHF 8.2 billion.

Net income shrank by a third compared to the same quarter of the previous year to around three billion francs. Particularly critical: In asset management, the bank’s most important business area, Credit Suisse was unable to stop its outflow of funds by the end of the year. Because of the uncertainty about the state of the big bank, customers in this division alone withdrew 95 billion francs net in the final quarter. At the same time, the costs in the unit also increased by ten percent.

Overall, cash outflows amounted to CHF 110.5 billion, of which CHF 84 billion up to mid-November. At the end of October, the bank was shaken by unfounded bankruptcy rumors on social media.

The bottom line was a loss before taxes in wealth management from October to December of 155 million francs, for the whole of 2022 the pre-tax loss totaled 631 million francs. For comparison: in 2021, the bank was still able to post a pre-tax profit of CHF 2.3 billion in its core business.

Spin-off of the investment bank is progressing

The investment bank also suffered significant losses again: the pre-tax loss was CHF 3.5 billion in 2021 and amounted to CHF 3.1 billion in the past financial year. This was due, among other things, to significantly lower income from trading in fixed-income securities and from capital market business.

The business on the Swiss home market, meanwhile, made a profit of 1.5 billion francs. However, this is 19 percent less than in the previous year.

The top management around CEO Ulrich Körner is driving the restructuring of the group: The bank announced that it would take over the investment banking boutique of the former board member Michael Klein for 175 million dollars. The firm is set to be merged with most of Credit Suisse’s investment banking business and relaunched under the Credit Suisse First Boston brand.

The sale of the securitization business (Securitized Products Group) to the US financial investor Apollo Global Management should bring in around 0.8 billion dollars.

However, it will take some time before the restructuring creates value for shareholders: the group still expects a significant pre-tax loss for 2023.

More: Credit Suisse is targeting strong growth for subsidiary CSFB

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