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Over $68b withdrawn from Credit Suisse ahead of UBS takeover
More than $68 billion had been withdrawn from Credit Suisse in the first three months of 2023, the bank said Monday in what are likely its final quarterly results before it is swallowed by rival UBS.
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A sign of Switzerland's Credit Suisse bank is seen on an office building in Zurich on Nov. 8, 2022. (AFP/Fabrice Coffrini)
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ore than US$68 billion had been withdrawn from Credit Suisse in the first three months of 2023, the bank said Monday in what are likely its final quarterly results before it is swallowed by rival UBS.
Switzerland's longtime second-largest bank saw 61.2 billion Swiss francs ($68.6 billion) withdrawn in the first quarter alone.
At the same time, the bank saw its net profit swell to 12.8 billion francs, up from a significant loss a year earlier, mainly as a result of its high-risk debtors being wiped out in the emergency takeover deal.
Investors had been eagerly awaiting the results as they seek clues to the magnitude of the challenges facing UBS, which was strongarmed last month by Swiss authorities into the mega merger.
Credit Suisse said the "significant net asset outflows" were particularly heavy in the second half of March, as it was engulfed by panic prior to the hastily arranged takeover by its larger domestic competitor.
"These outflows have moderated but have not yet reversed as of April 24, 2023," the bank said in its earnings statement.
The outflow numbers did not come as a complete surprise, however.
US financial services firm Morningstar said last week that data it had compiled suggested the bank saw around 4.6 billion euros ($5.1 billion) withdrawn from funds during March alone, marking the biggest monthly outflow on record.
Credit Suisse had suffered a string of scandals over several years, and after three US regional banks collapsed in March unleashing market panic, it was left looking like the weakest link in the chain.
Over the course of a nerve-wracking weekend, Swiss authorities organised an emergency rescue, pressuring UBS to agree to a $3.25-billion mega merger on the evening of March 19.
Justifying the move to parliament earlier this month, Swiss President Alain Berset said that "without intervention, Credit Suisse would have found itself, in all likelihood, in default on March 20 or 21".
In 2022, Credit Suisse suffered a 7.3-billion-franc loss, with 110.5 billion francs in outflows in the final quarter alone.
That stood in stark contrast to the $7.6 billion profit raked in by UBS last year.
Monday's quarterly report will likely be Credit Suisse's last one, depending on how long it takes to finalise the merger with UBS, which will present its results Tuesday.
