London CNN —
Credit Suisse bled customer deposits worth 67 billion Swiss francs ($75.2 billion) in the first three months of the year, and money is still leaving the bank as UBS races to complete a rescue of its stricken rival.
The bank run was “most acute” in the days just before and just after the announcement of the takeover by UBS (UBS) on March 19, Credit Suisse said in a statement Monday. Outflows have since “stabilized to much lower levels, but had not yet reversed as of April 24, 2023,” the bank added.
Credit Suisse (CS) also reported net asset outflows of 61.2 billion francs ($68.7 billion) in the first quarter, a figure that includes some deposits. This amounted to about 5% of assets under management.
The embattled lender’s first-quarter earnings could be its last after it was bought last month by UBS in an emergency deal orchestrated by the Swiss government. Regulators in Switzerland, the United States and United Kingdom have already approved the deal, in full or in part.
Swiss authorities judged that the tie-up offered the best chance of restoring stability in the global banking sector, which had been rattled by the failure of two US regional banks.
Credit Suisse had been plagued by scandals and compliance failures in recent years that wiped out its profit and caused it to lose clients.
Customers withdrew 111 billion francs ($121 billion) in the final three months of 2022, when the bank was hit by social media speculation that it was on the brink of collapse. The failure of Silicon Valley Bank and Signature Bank in America months later drove a fresh wave of asset flight as investors and clients sought safer havens.
Credit Suisse reported a 1.3 billion franc ($1.5 billion) loss for the first quarter, extending a losing streak that began in 2021. The bank posted a loss of 7.3 billion Swiss francs ($7.9 billion) in 2022, its biggest annual loss since the financial crisis in 2008.
The parlous state of its business presents an enormous challenge to UBS as it executes a first-of-its-kind merger of two global banks with combined assets of nearly $1.7 trillion.
Fully integrating the businesses will take three to four years, according to UBS chairman Colm Kelleher, who has warned of “huge” risks in combining the lenders.
UBS has brought back its former CEO Sergio Ermotti to manage the complex task. Ermotti will need to cut thousands of jobs and downsize Credit Suisse’s investment bank, while aligning the lender with a more conservative risk culture.
Kelleher told reporters earlier this month that UBS did not want to “import a bad culture” and would put all Credit Suisse employees through a “culture filter.”
