Credit Suisse Loses CHF 1.3 Billion in Q1 2023, Resigns From Klein Takeover
- The controversial write-off of CHF 15 billion AT1 bonds resulted in a one-off profit.
- However, the adjusted results showed a loss of CHF 1.3 billion.
Credit Suisse has announced its Q1 2023 financial results, highlighting a pre-tax income of CHF 12.8 billion ($14.1 billion) and a CET1 capital ratio of 20.3%. The quarter was marked by growing challenges, primarily stemming from the planned merger Merger A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers d A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers d Read this Term with UBS Group AG, which was revealed in March.
Credit Suisse Sees Significant Asset Outflows
The bank's performance during the quarter was significantly impacted by a CHF 15 billion write-down in Additional Tier 1 (AT1) capital notes, ordered by the Swiss Financial Market Supervisory Authority (FINMA) in light of the impending merger.
Nonetheless, the adjusted results reveal that the company's net revenue reached CHF 2.8 billion, representing a decline of 40% compared to the same period in 2022. Additionally, the final adjusted pre-tax loss amounted to CHF 1.3 billion, witnessing an increase of CHF 300 million compared to Q4 2022.
Credit Suisse's problems resulted in substantial asset and deposit outflows, with impacted assets under management (AuM) of CHF 1.3 billion. Deposit outflows represented 57% of the quarter's Wealth Management and Swiss Bank net asset outflows. It means that during the three-month period ending in March, it experienced a net outflow of assets worth more than CHF 61 billion.
The strongest outflow of assets was observed in Wealth Management, amounting to 9% of the AuM reported in the previous quarter. Adjusted revenues for the division decreased by 33% year-over-year, and its adjusted pre-tax loss was CHF 115 million.
Credit Suisse Cuts Employment and Abandons Acquisition of the Klein Group
Despite the turbulence surrounding the merger, "Credit Suisse is taking proactive measures to protect its client franchise, manage risks and facilitate operational stability," the company commented in the quarterly report. The bank is making headway on cost transformation programs and risk reduction initiatives following a review of its financial plans.
In the Special Purpose Group (SPG), the bank has successfully reduced asset equivalent exposures by approximately USD 48 billion since Q3 2022, amounting to more than 85% of the targeted reduction of USD 55 billion. This significant reduction has positively impacted SPG and its related financing businesses.
Additionally, the Non-Core Unit (NCU) has seen substantial reductions in Risk Weighted Assets (RWA) and leverage exposure, with a decrease of approximately USD 4 billion and USD 14 billion, respectively, since Q4 2022. These reductions demonstrate Credit Suisse's commitment to optimizing its balance sheet and minimizing risk.
In terms of cost actions, the bank has made notable progress on its cost transformation program, with adjusted operating expenses in Q1 2023 dropping by 6% year-over-year. This decrease is attributed to lower general and administrative expenses and a reduction in compensation and benefits. Furthermore, Credit Suisse has achieved a reduction of 9% in its workforce since Q3 2022, contributing to its cost-saving efforts.
Credit Suisse announced job cuts as early as January and continued with them in March. The process accelerated this month when news of the UBS takeover emerged. The bank has decided that a total of 36,000 jobs will need to be cut across both units.
Lastly, in light of the recently announced merger with UBS Group AG, Credit Suisse Group AG and M. Klein & Co LLC have mutually agreed to terminate the acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term of The Klein Group, LLC (the investment banking business of M. Klein & Co. LLC). The decision to acquire Klein was announced in February when Credit Suisse reported CHF 7.3 billion annual loss.
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Credit Suisse has announced its Q1 2023 financial results, highlighting a pre-tax income of CHF 12.8 billion ($14.1 billion) and a CET1 capital ratio of 20.3%. The quarter was marked by growing challenges, primarily stemming from the planned merger Merger A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers d A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers d Read this Term with UBS Group AG, which was revealed in March.
Credit Suisse Sees Significant Asset Outflows
The bank's performance during the quarter was significantly impacted by a CHF 15 billion write-down in Additional Tier 1 (AT1) capital notes, ordered by the Swiss Financial Market Supervisory Authority (FINMA) in light of the impending merger.
Nonetheless, the adjusted results reveal that the company's net revenue reached CHF 2.8 billion, representing a decline of 40% compared to the same period in 2022. Additionally, the final adjusted pre-tax loss amounted to CHF 1.3 billion, witnessing an increase of CHF 300 million compared to Q4 2022.
Credit Suisse's problems resulted in substantial asset and deposit outflows, with impacted assets under management (AuM) of CHF 1.3 billion. Deposit outflows represented 57% of the quarter's Wealth Management and Swiss Bank net asset outflows. It means that during the three-month period ending in March, it experienced a net outflow of assets worth more than CHF 61 billion.
The strongest outflow of assets was observed in Wealth Management, amounting to 9% of the AuM reported in the previous quarter. Adjusted revenues for the division decreased by 33% year-over-year, and its adjusted pre-tax loss was CHF 115 million.
Credit Suisse Cuts Employment and Abandons Acquisition of the Klein Group
Despite the turbulence surrounding the merger, "Credit Suisse is taking proactive measures to protect its client franchise, manage risks and facilitate operational stability," the company commented in the quarterly report. The bank is making headway on cost transformation programs and risk reduction initiatives following a review of its financial plans.
In the Special Purpose Group (SPG), the bank has successfully reduced asset equivalent exposures by approximately USD 48 billion since Q3 2022, amounting to more than 85% of the targeted reduction of USD 55 billion. This significant reduction has positively impacted SPG and its related financing businesses.
Additionally, the Non-Core Unit (NCU) has seen substantial reductions in Risk Weighted Assets (RWA) and leverage exposure, with a decrease of approximately USD 4 billion and USD 14 billion, respectively, since Q4 2022. These reductions demonstrate Credit Suisse's commitment to optimizing its balance sheet and minimizing risk.
In terms of cost actions, the bank has made notable progress on its cost transformation program, with adjusted operating expenses in Q1 2023 dropping by 6% year-over-year. This decrease is attributed to lower general and administrative expenses and a reduction in compensation and benefits. Furthermore, Credit Suisse has achieved a reduction of 9% in its workforce since Q3 2022, contributing to its cost-saving efforts.
Credit Suisse announced job cuts as early as January and continued with them in March. The process accelerated this month when news of the UBS takeover emerged. The bank has decided that a total of 36,000 jobs will need to be cut across both units.
Lastly, in light of the recently announced merger with UBS Group AG, Credit Suisse Group AG and M. Klein & Co LLC have mutually agreed to terminate the acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term of The Klein Group, LLC (the investment banking business of M. Klein & Co. LLC). The decision to acquire Klein was announced in February when Credit Suisse reported CHF 7.3 billion annual loss.
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