Credit Suisse AM outflows hit €11.8bn in Q1

Credit SuisseCredit Suisse's asset management unit suffered net outflows of CHF 11.6 billion (€11.8 billion) during the first quarter as investors rushed to withdraw cash prior to the bank's collapse. Net revenues and operating expenses for the asset management unit also decreased by 45% and 24%, respectively, in the first quarter of 2023 from the same period last year. 

While total operating expenses were lower, the asset management unit reported a pre-tax loss of CHF 27 million compared to a pre-tax income of CHF 56 million in Q1 in 2022. 

The Swiss bank's latest financial statement revealed the group suffered outflows across the board during this period.

Assets managed by the wealth management division decreased from CHF 707 billion in March 2022 to CHF 502.5 billion in March 2023.

The bank experienced significant withdrawals of cash deposits as well as non-renewal of maturing time deposits, which led to poor performance in the first quarter. 

The bank reported a pre-tax profit of CHF 12.8 billion due to the Swiss regulator's move to wipe out investor holdings of €15.6 billion of Credit Suisse bonds in March.

However, when adjusted for these factors, the bank lost CHF 1.3 billion of profit in the first quarter.

The bank's financial results stated: "Credit Suisse experienced significant net asset outflows, particularly in the second half of March 2023. These outflows have moderated but have not yet reversed as of April 24, 2023."

Customers started withdrawing large sums of money after the collapses of Silicon Valley Bank and Signature Bank created global market turmoil. 

Following the bank collapses, the Swiss authorities provided a rescue package which saw UBS agree to takeover Credit Suisse for CHF 3 billion in March.

The Swiss National Bank also provided a loan of CHF 108 billion to Credit Suisse to support the bank's operations amid market uncertainty. The bank has reported repaying CHF 60 billion in the first quarter and a further CHF 10 billion in April. 

The takeover of Credit Suisse by UBS is set to create one of the largest asset managers in Europe. However, the deal is under investigation by Switzerland's federal prosecutor. 

© 2023 funds europe

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