Before the collapse of Credit Suisse, 55 billion pounds were withdrawn

2023-04-24 08:40:00, Ekonomi CNA

Before the collapse of Credit Suisse, 55 billion pounds were withdrawn

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Credit Suisse says 61.2 billion Swiss francs (£55.2 billion; $68.6 billion) were withdrawn from the bank in the first three months of the year.

This comes after the bank reported what are expected to be its latest financial results. Its forced sale to rival Swiss bank UBS is expected to be completed soon.

Credit Suisse's main wealth management division saw the amount of assets it managed fall to 502.5 billion francs at the end of March, almost 29% lower than the same period last year, Credit Suisse said in a statement.

"These outflows have moderated but have not yet recovered as of April 24, 2023."

Credit Suisse clients began pulling money from the bank after it was caught in the market turmoil that followed the collapses of Silicon Valley Bank and Signature Bank in the US in March.

In Switzerland, the authorities created a rescue package for Credit Suisse. It included more than 200 billion francs in financial guarantees and prompted UBS to agree to take over Credit Suisse.

Credit Suisse had suffered losses and faced a series of problems in recent years, including allegations of money laundering.

It reported a loss of 7.3 billion Swiss francs in 2022 - its worst year since the 2008 financial crisis - and had warned it did not expect to be profitable until 2024.

The Swiss investigation into the takeover of Credit Suisse by UBS

Commenting on the latest results, Frances Coppola, an independent banking analyst, told the BBC's Today program that Credit Suisse had also seen billions withdrawn in the last three months of 2022.

"Banks don't survive outflows like that, they really don't, no matter how big they are."

Shanti Kelemen, chief investment officer at M&G Wealth Investments, said that given the size of the bank, the exits "would be a big number".

The failure of Silicon Valley Bank and Signature Bank in the US came as the value of the assets they owned fell sharply as a result of rising interest rates.

It sent banking stocks around the world sharply lower amid concerns that other lenders could face similar problems.

Investor concerns have since eased, but Ms Coppola said others may still face difficulties.

"I think we will see more banking turbulence. I don't know if it will affect big banks like this."/ CNA.al