ZURICH, SWITZERLAND — More than US$68 billion was withdrawn from Credit Suisse in the first three months of 2023, the bank said Monday in what is likely its final quarterly results before it is swallowed by rival UBS.
Switzerland’s long-time second-largest bank saw 61.2 billion Swiss francs (US$68.6 billion) withdrawn in the first quarter alone.
At the same time, the bank saw its net profit swell to 12.4 billion francs, up from a significant loss a year earlier, after holders of high-risk Credit Suisse debt were 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 24 April 2023,” the bank said in its earnings statement.
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 US$3.25-billion mega-merger on the evening of 19 March.
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 20 or 21 March”.
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 US$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.