1/26/2024 0 Comments Www panic com candybar![]() It repaid another 10 billion francs in April, after the quarter closed. Without the adjustment, Credit Suisse posted a loss of 1.3 billion francs.Īt the end of the first quarter, Credit Suisse’s borrowings from the Swiss National Bank totaled 108 billion francs, after it had repaid 60 billion francs of borrowings, to support its liquidity levels. That move proved hugely contentious, with many investors exploring legal options even after the Swiss government maintained the move was within its rights under the securities’ contract. The quarterly profit was boosted by the write down to zero of 15 billion francs of additional tier 1 capital notes as part of UBS’s acquisition of Credit Suisse. Shrinking assets under management and deposits reduce net interest income, as well as recurring commissions and fees. The bank also took a 1.3 billion franc impairment charge mostly related to the wealth business. While Credit Suisse said that outflows have moderated but not yet reversed, it also lost about 6.9 billion at the Swiss unit, mostly at the private clients business, and a further 11.6 billion francs in asset management. Still, UBS is paying about 3 billion francs for a firm that finished March with a book value of 54 billion francs, giving it plenty of protection against further losses. Chairman Colm Kelleher has already warned that the takeover is more challenging than many of the banking rescues that were executed during the 2008 financial crisis. The outflows and expected losses this year at key businesses such as wealth and investment banking are some of the clearest indications yet of the risks for UBS in an integration that the bank has said may take up to four years. “The revenue trajectory is so damaged that the deal could well remain a drag on UBS operating results unless a deeper restructuring plan is announced.” “The magnitude of losses and outflows is alarming,” Keefe, Bruyette & Woods’ analysts including Thomas Hallett wrote in a note to investors. That triggered the second crisis of confidence within months and ultimately led the Swiss government to broker the bank’s rescue because of fears it was heading toward bankruptcy. Wealthy clients and retail depositors pulled billions from Credit Suisse last month after its anchor Saudi shareholder said that it would not invest more in the company. Without that, it would have posted another loss. Ironically, in what may be its final quarter as a standalone company, Credit Suisse had a record 12.4 billion-franc profit, but only because of a gain tied to the controversial regulatory decision to wipe out many of its bondholders in the deal. The figures give a fuller picture of the drama that ended Credit Suisse’s 167-year run as one of the most storied European banks and a sense of the work ahead for UBS. First-quarter results on Monday showed that its key units continued to lose money and shed clients, and the firm borrowed far more from a central bank liquidity backstop than previously known. The Swiss bank lost more than 200 billion francs of customer deposits over a six-month period, culminating in several frantic days in March before the government-orchestrated sale.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |