It was just a run on the bank. More than $68 billion has been paid out by Credit Suisse

Credit Suisse showed on Monday Score report For the first quarter of 2023, in which … a profit of CHF 12.43 billion. However, this was as a result of the AT1 bond redemption of 16 billion Swiss francs and was classified as a “one-time gain”. The write-off of AT1 is also a matter of controversy, since it changed the generally accepted arrangement for covering bank losses and the status of the owners of the so-called Coco bonds in front of the shareholders. However, as it turned out, it corresponded to the case documents Capital bonds.

Billions are taken from Credit Suisse

in the first quarter Credit Suisse posted net revenues of CHF 18.5 billionBut already corrected result Pre-tax (for one-time events) Show the bank’s loss of 1.3 billion Swiss francs. From this perspective, the eighth of the last 10 quarters have been in the red. In the fourth quarter of 2022, Credit Suisse was CHF 1.39 billion in the red.

Leading wealth management division Credit Suisse saw its assets under management fall to CHF 502.5 billion at the end of March. That’s 29 percent. less than the same period in 2022.

One of the most interesting information in the score report is Asset flow, which in the first quarter of the year amounted to 61.2 billion Swiss francs ($68.6 billion) After customers withdrew more than CHF 110 billion in cash in the previous quarter.

Total payment points Over the past six months it has already been reported 171.7 billion Swiss francs, which when converted at the average CHF/PLN exchange rate from that period, gives about an astronomical PLN 820 billion. For comparison, Polish budget revenues in 2023 are set at PLN 605 billion in the law.

cycle breakdown

The outflow of assets, the subsequent years with losses and the forecast for the following years, despite the restructuring activities undertaken, led to a loss of credibility in the eyes of investors and destroyed the shares of the second largest bank in Switzerland. The bankruptcy of a bank with a history of 167 years led to measures being taken to save it in March from complete collapse. This operation, important due to the size of the enterprise and its systemic importance, was joined by the Swiss authorities and the largest competitor, i.e. UPS.

This will soon be followed by a forced sale of Credit Suisse to rival UBS. As part of the bank bailout, 22.48 shares of the acquiring bank were approved for 1 share of UBS. This means that the shares of the troubled bank were valued at 0.76 Swiss francs. It currently costs 0.80 CHF, although in October 2022 it cost 4.3 CHF, and in January 2023 3.1 CHF.

The entire operational acquisition is scheduled to be completed later this year, however CNBC reportsthat it would take approximately three to four years for the UBS group to fully absorb Credit Suisse’s business. Turn, the gate SwissInfo announces that the acquisition will close in the coming weeks. Thus, the current report for the first quarter will be the last that Credit Suisse will submit as an independent company.

It should include the whole process with a significant reduction in employment, as Katarzyna Wiązowska writes in more detail in Bankier in her article “UBS will take over CS and lead to redundancies. Tens of thousands of people around the world may lose their jobs.

Historic march

Credit Suisse customers began withdrawing their money from the bank after the markets were rocked by the collapse of Silicon Valley Bank and Signature Bank in the US in March this year. Bank shares – for example Deutsche Bank – began to fall sharply due to fears of a further spread of the crisis. Switzerland has prepared a rescue package for Credit Suisse with CHF200 billion in financial guarantees.

Prosecutors have launched an investigation into the sudden takeover of Credit Suisse, the country’s second largest bank. The deal outraged taxpayers and shareholders – not only the acquired institution, but also the acquirer, that is, UBS. At the time the deal was announced, Credit Suisse was worth $3.15 billion, while on Friday, before the deal was signed, it was worth $8 billion.

In recent years, Credit Suisse has been racking up losses and has suffered a number of problems, including accusations of running Nazi accounts after World War II. In 2022 – the worst since the 2008 financial crisis – it posted a loss of CHF7.3 billion. At the same time, he warned that he does not expect a profit until 2024.

Analyst comments BBC News Leave no illusions – no bank can handle such an influx of money – no matter how big. In their opinion, this is not the end – we will see more banking disruptions.