(The Telegraph) - Credit Suisse has suffered its biggest annual loss since the 2008 financial crisis and scrapped bonuses for its top executives as the scandal-hit lender embarks on a drastic overhaul.
The Swiss bank said clients withdrew a record amount of funds in the final three months of last year, as it posted a net loss of 1.39bn Swiss francs (£1.3bn) during the quarter. The bruising period took its total loss for 2022 to 7.3bn Swiss francs.
The country’s second-biggest lender is still struggling to recover from a rush of withdrawals in September and October after a social media storm raised questions about its financial health. Total outflows for the quarter hit a mammoth 110.5 billion francs, the bank said.
Credit Suisse has lurched from crisis to crisis in recent years, suffering a series of costly mishaps that have driven its share price down more than 60pc in the last year.
In October, Ulrich Körner, the bank’s new chief executive, unveiled a three-year turnaround plan, which will see the 166-year-old lender cut around 9,000 jobs, shift its focus from investment banking towards managing the wealth of its rich clients and take a 1.5bn Swiss Franc investment from Saudi Arabia’s biggest bank.
However, the continued losses and outflows underscore the urgency for the bank’s new management team to get a handle on the reforms with investors and analysts showing limited patience. Shares fell a further 5pc in early trading on Thursday.
While Axel Lehmann, the bank’s chairman, has sought to stem the exodus of clients, the loss of assets will see the bank's key wealth management unit continue to haemorrhage cash into the first quarter of this year.
The bank said none of its executives, including Mr Körner, would receive bonuses following the poor performance.
But executives and about 500 senior managers are reportedly set to share a 350m Swiss franc payout upon a successful implementation of its restructuring plan.
As part of the overhaul, Credit Suisse’s investment bank, will be spun off as CS First Boston, which will be led by veteran banker Michael Klein and focus on advisory work such as mergers and acquisitions and capital markets dealmaking.
The lender endured twin hits in 2021 following the collapse of supply chain finance group Greensill Capital and family office Archegos. The scandals, which triggered a prolonged period of crisis for the bank, led to $10bn (£8bn) of its clients’ assets being frozen and a $5.5bn trading loss.
Mr Körner said: “2022 was a crucial year for Credit Suisse. We announced our strategic plan to create a simpler, more focused bank, built around client needs and since October we have been executing at pace.”
“We have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation by reshaping our portfolio, reallocating capital, right-sizing our cost base and building on our leading franchises.”
By Simon Foy
