London Daily

Focus on the big picture.
Friday, May 09, 2025

Over $68 Billion Withdrawn From Credit Suisse Before UBS Takeover

Over $68 Billion Withdrawn From Credit Suisse Before UBS Takeover

The bank also reported deceptively bloated net profits for the quarter, after its high-risk debts were wiped out in the mega-merger deal, but warned of "substantial" losses to come.
Tens of billions were withdrawn from Credit Suisse in the first three months of 2023, the bank's earnings report showed Monday, providing clues to the towering challenges ahead as UBS prepares an emergency takeover.

Switzerland's long-time second largest bank saw 61.2 billion Swiss francs ($68.6 billion) withdrawn in the first quarter alone, it said Monday in what is likely its final quarterly report before it is swallowed by its larger domestic rival, UBS.

The bank also reported deceptively bloated net profits for the quarter, after its high-risk debts were wiped out in the mega-merger deal, but warned of "substantial" losses to come.

Investors had been eagerly awaiting the results as they seek clues to the magnitude of the challenges facing UBS, Switzerland's largest bank, after it was strongarmed last month by Swiss authorities into the shotgun marriage.

The results seemed to be greeted with some optimism.

In early afternoon trading, Credit Suisse's shares rose nearly two percent to 0.81 Swiss francs a piece and UBS's were up 1.6 percent at 18.35 francs a share, as the Swiss stock exchange's main SMI index rose 0.14 percent.

'Bad shape'

But Vontobel analyst Andreas Venditti warned in a research note that Credit Suisse's report "reveals the bad shape the firm is in".

"UBS undoubtedly faces a major (and urgent) task in deeply restructuring its former competitor."

Credit Suisse said the "significant net asset outflows" were particularly heavy in the second half of March, as it was engulfed by panic in the days surrounding the hastily arranged takeover.

"These outflows have moderated but have not yet reversed as of April 24, 2023," the bank said in its earnings statement.

Analysts with the Zurich Cantonal Bank (ZKB) stressed that Credit Suisse's outflows for the quarter were "less than feared".

But they come after the bank already saw 110.5 billion francs in outflows in the fourth quarter of 2022.

Mr Venditti pointed out that over the past six months, Credit Suisse's wealth management division alone had seen 140 billion francs in net new money outflows.

The bank meanwhile said it saw its net profit swell in the first quarter to 12.4 billion francs, up from a significant loss a year earlier.

Debt wipe out

But that was largely attributed to holders of high-risk Credit Suisse debt being wiped out in the emergency takeover deal.

Swiss authorities required that close to 16 billion Swiss francs ($17.9 billion) in so-called additional tier 1 (AT1) bonds be rendered worthless before Switzerland's two biggest banks united.

The order by the Swiss Financial Market Supervisory Authority (FINMA) infuriated bondholders, and a number of them have begun launching legal action against the regulator.

Credit Suisse said its quarterly results were also boosted by the 700-million-Swiss-franc sale of a significant part of its Securitized Products Group to Apollo Global Management.

But despite this, on an adjusted basis, the bank said it nonetheless suffered a pre-tax loss for the quarter of 1.3 billion Swiss francs.

The bank, which last October launched a vast restructuring plan including carving out its investment arm, said that unit had suffered an adjusted pre-tax loss of 337 million in the first quarter.

'Substantial' losses

And it warned that "in light of the merger announcement, the adverse revenue impact from the previously disclosed exit from non-core businesses and exposures, restructuring charges and funding costs", it expected to see a "substantial" pre-tax losses in its investment bank unit and overall in the second quarter and full year of 2023.

Credit Suisse also said Monday that it had scrapped a deal to acquire the investment advisory business of M. Klein & Company and fold it into the First Boston brand, which it had planned to resurrect as part of its investment bank overhaul.

The bank said the sides had "mutually agreed to terminate" the $175-million acquisition "considering Credit Suisse's recently announced merger with UBS."

Credit Suisse suffered a string of scandals over the past several years, and after the collapse of three US regional banks unleashed market panic, it was left looking like the weakest link in the chain.

Over the course of a nerve-wracking weekend, Swiss authorities organised an emergency rescue, pressuring UBS to agree to a $3.25-billion mega merger on the evening of March 19.

Justifying the move to parliament earlier this month, Swiss President Alain Berset said that "without intervention, Credit Suisse would have found itself, in all likelihood, in default on March 20 or 21".

In 2022, Credit Suisse suffered a 7.3-billion-franc loss, in stark contrast to the $7.6 billion profit raked in by UBS last year.

UBS is due to publish its first quarter results on Tuesday.
Newsletter

Related Articles

0:00
0:00
Close
Historic Papal Conclave Set to Commence in Rome
Huge Copper, Gold, and Silver Discovery in Argentina and Chile — But the Profits Go Abroad
Prince Harry is pleading for reconciliation — but the royals are just as sick of his victimhood as everyone else
The Road to Freedom: She Protested Putin, Escaped House Arrest, and Survived a 2,800-Kilometer Journey
OpenAI's Flip-Flop: No Longer Going Commercial, Back to Nonprofit, After Musk Lawsuit and Backlash
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
First From China: Zhao Xintong Wins the Snooker World Championship
Nvidia Faces Billion-Dollar Losses – Warns: China Is on Its Way to Becoming an AI Superpower
Trump Rules Out Third Term, Names JD Vance and Marco Rubio as Potential Successors
Mexico Says ‘No’ to U.S. Troops: President Sheinbaum Rejects Trump’s Offer to Fight Cartels
Nigel Farage’s Reform UK Storms the Map, Wrecking the Two-Party Monopoly
DOGE: Reimagining Government Operations with AI
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
U.K. Court Rejects Prince Harry’s Final Appeal Over Police Security
Prince Harry’s Heartfelt Outburst Rocks the Royal Family
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Transgender Swimmer Secures Five Gold Medals at U.S. Masters Championship
Prince Harry: “I Want Reconciliation with My Family”
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Reform UK Surprises in British Elections, Challenging Traditional Two-Party System
180-Year-Old Christian University in South Carolina Announces Closure Due to Unmet $6 Million Fundraising Goal
Brazilian Woman Jailed for Fourteen Years for Writing “You Lost, Idiot” on Statue During Protest
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
Dutch Politician Eva Vlaardingerbroek Receives Spyware Threat Alert from Apple
Paramount Board Considers Settlement in Trump’s $20 Billion Lawsuit Over "60 Minutes" Interview
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
Deadline Looms for RTS Meter Replacement: Hundreds of Thousands at Risk of Heating Disruption
Sweden Grapples with Deadly Gun Violence: Suspect Arrested After Three Young Men Killed in Uppsala Hair Salon
Walz Reveals Why Harris Chose Him as Her Running Mate and Reflects on Democratic Losses
Spain Restores Power After Unprecedented Nationwide Blackout
Carney Secures Liberal Mandate in Canada’s Federal Election
Death Penalty Sought as Luigi Manion Pleads Not Guilty in CEO Murder Case
President Trump contacts Jeff Bezos after reports of Amazon considering listing tariff surcharges; company clarifies no such plan for main platform
Spain and Portugal Recover from Massive Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
Singapore Politicians Warn Against Foreign Interference in Election
Driver Ploughs into Vancouver Festival Crowd, Killing Nine
Depression, Fear of Defamation, and a Tragic End: New Details on Virginia Giuffre’s Suicide
“Sharia for UK, Allah Akbar!”
Massive Explosion at Iran's Bandar Abbas Port Linked to Suspicious Chemical Shipments
Incident Reflection: A Harsh Reality Check
Pakistani migrants to Danish man: “ “We have 5 children while you have 1 or 2. In 10 years, there will be more Pakistanis than Danes here.“
Clashes Erupt in London as Tensions Rise Between Indian and Pakistani Communities
Specialized anti-drone weapons deployed among security personnel Ahead of Papal Funeral
How do you fix this culture?
×