Credit Suisse outflows continue despite rescue

Zurich — Credit Suisse said on Monday it had Sf61bn ($68bn) in net asset outflows in the first quarter, adding that outflows were continuing even after the 167-year-old institution’s state-engineered rescue by UBS.

“These outflows have moderated but have not yet reversed since April 24,” Credit Suisse said.

It also said it has experienced significant withdrawals of cash deposits as well as non-renewal of maturing time deposits. Customer deposits declined Sf67bn in the first quarter.

The bank reported results for what is likely to be the last time, as its shotgun marriage with rival Swiss bank UBS is expected to be completed soon.

Assets managed by Credit Suisse’s flagship wealth management division dropped to Sf502.5bn at end-March, compared with Sf 707bn reported for the same period last year.

Clients rapidly started pulling money from Credit Suisse after it was ensnared in market turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank.

This led Swiss authorities to scramble together a rescue package in terms of which UBS agreed to take over Credit Suisse for Sf3bn in stock and assume up to Sf5bn in losses. It also included Sf200bn in state financial guarantees.

Credit Suisse said that at the end of the first quarter, it had Sf108bn of net borrowings under these facilities after paying back Sf60bn. It also said it had since paid back another Sf10bn.

The bank also said it had mutually agreed to terminate the planned $175 million acquisition of Michael Klein’s investment banking business, which it had intended to spin off with its own investment banking arm.

UBS has said it plans to scale back Credit Suisse’s investment bank.

Reuters