Tsunami Credit Suisse: loses 7.9 billion and the stock sinks on the stock market

Credit Suisse, overwhelmed by a series of financial scandals, recorded its largest annual loss in 2022 since the great crisis of 2008 and expects to go even more negative in 2023. The impact on the stock market is extremely violent with the stock dropping beyond 10 percent. The second largest Swiss bank, which presented a drastic restructuring plan in October, reported a net red of 7.3 billion Swiss francs, equal to 7.9 billion dollars. Citing the impact of restructuring charges and the exit from non-core businesses, the institute said in a statement it “expects the group to post a substantial pre-tax loss in 2023.” The renovation costs are estimated at around 1.6 billion Swiss francs this year and around one billion in 2024.

He waited for them
In the recent quarter, the net loss attributable to shareholders was almost 1.4 billion francs, slightly lower than expected. In November, the bank had issued a “profit warning” due to restructuring charges, lower activity on capital markets and withdrawals of large customers, saying it expected a loss of up to 1.5 billion Swiss francs. Credit Suisse recorded net asset outflows of 110.5 billion Swiss francs in the fourth quarter of last year alone. “We saw a turnaround in January,” said Chief Financial Officer Dixit Joshi, explaining that capital outflows were mostly concentrated in October, but slowed down in December.

The renovation
The sweeping restructuring plan unveiled in October centers on drastically downsizing the investment banking unit, at the center of the scandals. Among the changes, Credit Suisse has decided to relaunch its First Boston brand, named after a US investment bank it absorbed in 1990, by combining its capital markets and advisory businesses. Last Thursday, the bank also announced the acquisition of the assets of M. Klein & Company for 175 million dollars, thus taking a step forward in the transformation of its investment banking arm.