Wednesday, December 6, 2023

Credit Suisse lost €68.3bn in deposits in the first quarter

the swiss bank Credit Suisseacquired by its rival UBS, reported today that in the first quarter of 2023 it suffered a massive reduction in deposits amounting to 67,000 million francs (€68.3 billion) due to significant withdrawals during its crisis, which almost led to bankruptcy.

In its report published today, the bank admitted that the liquidity squeeze “was particularly acute in the days immediately before and after the merger announcement” (with UBS).

“HE stabilized at much lower levels, but as of today the situation has not yet been reversed,” admitted the Zurich entity, which in 2022 had already suffered a liquidity outflow of 123.2 billion francs (€125 billion) that contributed to a huge crisis of confidence that led to the sale to UBS.

Credit Suisse, which still functions as independent entitye until its merger is complete, earned 12.432 million Swiss francs (€12.6 billion) in the first quarter, compared to a loss of 7.293 million Swiss francs (€7.4 billion) registered in 2022.

The benefit despite the serious crisis it faces is explained by the cancellation of the AT1 bonds associated with the bank that the Swiss authorities ordered on the day of the merger, which reduced to zero some obligations which added, according to the report, 15,000 million francs (€15,300 million), the entity reported today.

This order has led numerous bondholders to file complaints against the Swiss authorities for the losses sufferedor to announce their intention to do so, both inside and outside the Swiss country.

Another extraordinary income linked to the strong benefits reported, according to the report, was the sale of a significant part of Credit Suisse’s securitized products to the New York firm Apollo, as part of the process of restructuring that the entity tried to get out of its crisis.

Credit Suisse reflected in its quarterly report revenues of 18.467 million Swiss francs or €18.8 billion (four times more than in the same period of 2022), against operating expenses of only 5.620 million Swiss francs (€5.3 billion).

excluding certain operations extraordinary, the bank had adjusted losses of 1,316 million francs (€1,340 million) in the first quarter of 2023.

The total assets of the bank, according to the report, fell in the January-March period to 540,291 million francs (€551,000 million), 27% less than a year ago.

Credit Suisse indicated in this report that it continues to work with UBS to guarantee that the merger “is completed on time”, although he stressed that this is subject to certain business closing operations that both entities have previously indicated could take months.


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