Credit Suisse warned on Wednesday it expected to post its fifth straight quarterly loss in the final three months of 2022, as net asset outflows sent its wealth management division into difficulties amid a painful restructuring of its operations.
The Swiss bank predicts it will post a pre-tax loss of around CHF 1.5 billion ($1.58 billion) in the fourth quarter, as reductions in deposits and assets under management are expected to affect net interest income, as well as recurring fees and commissions, dragging its wealth management unit into the red.
Zurich-based Credit Suisse suffered deposit and asset losses in the first two weeks of October after social media reports and a jump in its credit default swaps (CDS) sparked fears about the financial position of the bank.
As of November 11, net asset losses were equivalent to around 6% of total assets under management at the end of September, while outflows in the wealth management division were around 10%.
“In wealth management, these outflows have slowed substantially from the high levels of the first two weeks of October 2022, although they have not yet reversed,” the bank said in a statement.
Credit Suisse also projected a loss of approximately CHF 75 million on the sale of its stake in Allfunds Group, which is listed in Amsterdam.
Credit Suisse’s final results will depend on a series of factors, including the performance of its investment bank in the remainder of the quarter, the continuity of the exit of non-strategic positions, eventual amortizations of goodwill and possible sales of real estate, adds the statement .
The financial update comes before Credit Suisse held an extraordinary general meeting on Wednesday to implement changes made in its strategic review, which came after the bank suffered its fourth straight quarterly loss. With information from Dow Jones Newswires.
Source: CNN Brasil
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