Credit Suisse projected CHF1.5 billion of loss in the fourth quarter of this year as the firm undertakes a major strategic overhaul to rebuild investors confidence after several mistakes in these past few years that caused the company to lose billions of dollars.
The second largest Swiss bank and one of the biggest banks in Europe said in a market update on Wednesday that it expected to experience continuing asset outflows of approximately 6% of assets under management at the end of the third quarter this year, which would be the result of its massive restructure.
“These decisive measures are expected to result in a radical restructuring of the Investment Bank, an accelerated cost transformation, and strengthened and reallocated capital, each of which are progressing at pace,” Credit Suisse said.
“Together with the adverse revenue impact from the previously disclosed exit from the non-core businesses and exposures, and as previously announced on October 27, 2022, Credit Suisse would expect the Investment Bank and the Group to report a substantial loss before taxes in the fourth quarter 2022, of up to CHF ~1.5 billion for the Group”.
The firm stated that it is working toward a 15% cost-base reduction by 2025, amounting around CHF2.5 billion. The bank plans to reduce CHF1.2 billion in 2023.
The Swiss bank reported late October a net loss of CHF4.03 billion for its 3Q22 earnings performance, a huge plunge compared to only CHF504.9 million of net loss estimated by analysts. The loss was well below a CHF434 million of profit the bank made in the same period of last year.
An estimate of CHF1.5 billion net loss in the last quarter would be higher than Refinitiv consensus expected Credit Suisse