In the first three months of 2023, Credit Suisse reported its financial outcomes. The merger with UBS Group AG, announced in March, had an effect on its results.
The quarterly results of Credit Suisse were affected by a reduction of CHF 15 billion in Additional Tier 1 (AT1) capital notes. Which was approved by the Swiss Financial Market Supervisory Authority (FINMA).
The pre-tax income of Credit Suisse for the first three months of the year was CHF 12.8 billion.
Credit Suisse reported a 40% decline in adjusted net revenue for the first quarter of 2023, amounting to CHF 2.8 billion. The adjusted pre-tax loss for the quarter was CHF 1.3 billion, an increase of CHF 300 million from the previous quarter.
The bank experienced significant outflows of deposits and net assets, leading to assets under management (AuM) standing at CHF 1.3 trillion at the end of the quarter, a decrease of CHF 41 billion compared to the same period the year before.
Wealth Management and the Swiss Bank saw net asset outflows of CHF 61 billion, with 57% coming from deposit outflows. Credit Suisse is taking steps to reduce risk in light of the merger with UBS.
The company commented:
Credit Suisse is taking proactive measures to protect its client franchise, manage risks and facilitate operational stability.
Progress of Credit Suisse’s Cost Transformation Program and Asset Reduction
Credit Suisse has achieved a significant reduction in asset equivalent exposures of its Special Purpose Group (SPG) by almost USD 48 billion, surpassing the target reduction of USD 55 billion. This has had a positive effect on SPG’s related financing activities.
The Non-Core Unit (NCU) has also witnessed a notable decrease in Risk Weighted Assets (RWA) and leverage exposure. With a drop of around USD 4 billion and USD 14 billion respectively since Q4 2022. These reductions highlight the bank’s commitment to optimizing its balance sheet and limiting risk.
In addition, the cost transformation program has seen progress, with adjusted operating costs in Q1 2023 decreasing by 6% YoY, mainly due to reduced expenses and a decrease in compensation and benefits. Credit Suisse announced that it will cut a total of 36,000 jobs across both units, hastened by the UBS takeover.
Also, Credit Suisse and M. Klein & Co LLC have mutually decided to terminate the acquisition of The Klein Group due to the announced merger with UBS Group AG.
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