Credit Suisse (CSGN.CH) shares took a deep dive on Thursday after Switzerland’s second-biggest bank posted a fifth consecutive quarterly loss and outflow of wealthy clients. Lender also expects “substantial” full-year loss in 2023 before returning to profitability in 2024.
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Company recorded a quarterly loss of 1.39 billion francs on revenue of 3.06 billion francs, below analysts’ estimates of 1.34 billion francs loss on revenue of 3.15 billion francs.
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Wealthy clients withdrew 92.7 billion francs ($101 billion) out of the bank in Q4, while its competitor UBS (UBSG.CH) recorded inflows of $10.8 billion in the same period
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Open account Try demo Download mobile app Download mobile appCredit Suisse Wealth Management division recorded heavy outflows in Q4. Source: Credit Suisse via Market Watch
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For the full year of 2022, the bank reported a loss of 7.3 billion francs ($8 billion), which is the worst performance since 2008, roughly in line with Wall Street estimates.
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Lender said it was hit by "the challenging economic and market environment, significant deposit and net asset outflows at the beginning of the quarter and the execution of our strategic actions."
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CEO Ulrich Koerner told CNBC on Thursday that the full results were “completely unacceptable,” but underscored the need for the ongoing multi-year transformation program.
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As a part of the restructuring plan Credit Suisse announced the $175 million purchase of the investment banking business of U.S.-based M. Klein & Co. and plans to roll those operations into the revived CS First Boston investment bank.
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Bank forecasts further losses in both the investment bank and wealth management units in Q1, partly due to a drop in assets under management and lower deposits since announcing a broad restructuring in October.
Credit Suisse (CSGN.CH) stock has dropped more than 60% in the past year and recent quarterly results provided more fuel for the bears. Price broke below local support at CHF 3.06 which coincides with 23.6% Fibonacci retracement of the last downward wave and if current sentiment prevails sell-off may deepen towards lower limit of the local 1:1 structure at CHF 2.77 or even December 2022 lows at CHF 2.67. Source: xStation5
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