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Credit Suisse has reported its biggest annual loss since the 2008 financial crisis, capping a period of turmoil and laying bare the scale of the Swiss bank’s challenge in restoring its fortunes.
The lender on Thursday reported a SFr1.4bn ($1.5bn) loss for the fourth quarter, after previously signalling it could be up to SFr1.5bn following a turbulent October when clients pulled 10 per cent of the bank’s wealth management assets. The bruising quarter took the bank’s annual loss to SFr7.3bn.
Customers withdrew SFr107bn from the group over the quarter, with two-thirds of outflows in October, the bank added on Thursday.
Credit Suisse is embarking on a radical restructuring in an attempt to draw a line under a series of crises and return to profit.
Under the plan, the group is axing 9,000 of its 52,000-strong workforce, spinning off its investment bank in a move that will also revive the First Boston name as well as beefing up its wealth management business.
The bank warned on Thursday that it expected to make another “substantial loss” in 2023 as it absorbs restructuring costs.
Alongside its quarterly results, the bank also announced it had completed the acquisition of M Klein & Company, the advisory boutique owned by Michael Klein, the former director who will run Credit Suisse’s spun-off investment bank.
Credit Suisse paid $175mn for the business in the form of a convertible note. Klein has been named chief executive of banking at Credit Suisse and head of the Americas. He has joined the executive board and will report to group CEO Ulrich Körner.
Korner said the acquisition marked “another milestone in the carve-out of CS First Boston as a leading independent capital markets and advisory business”, adding: “The transaction should further strengthen CS First Boston’s advisory and capital markets capabilities.”
Credit Suisse also announced that the first stage of the deal to sell its securitised products business to Apollo was complete, with the new venture to be called Atlas SP Partners.
In the final three months of last year, Credit Suisse reported a 33 per cent fall in revenues, largely down to a 74 per cent decline in investment banking fees, while wealth management revenues fell 17 per cent and asset management income dropped 28 per cent.
While the results revealed the outflows during a bruising quarter, the bank’s chair and chief executive insisted that the outflows had been staunched and customers were beginning to return.
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