Credit Suisse Reports Massive Loss, CEO Vows to Turn Things Around in Strategic Overhaul

Credit Suisse, the Swiss multinational investment bank, has reported a fourth-quarter and full-year net loss that missed expectations. The bank's CEO, Ulrich Koerner, has described the results as “completely unacceptable.” The lender's full-year loss came in at 7.3 billion Swiss francs, which was worse than the expected 6.53 billion Swiss francs.

Credit Suisse is currently undergoing a multi-year transformation program, aimed at simplifying and transforming its business. The program was announced in October 2022, under pressure from investors, to return to stable profitability following chronic underperformance in its investment bank and a litany of risk and compliance failures. The CEO of the bank stated that 2022 was a crucial year for Credit Suisse and that the bank was “executing at pace” on its strategic plan to create a “simpler, more focused bank.”

In November 2022, Credit Suisse projected a 1.5 billion Swiss franc loss for the fourth quarter due to large-scale restructuring costs. The bank also raised $4.2 billion in capital, which included the sale of 9.9% of its shares to the Saudi National Bank, making it the bank's largest shareholder. The Qatar Investment Authority also doubled its stake in the bank, becoming its second-largest shareholder.

Despite reports of liquidity concerns, the CEO of the bank stated in January 2023 that the bank had seen a sharp reduction in outflows, and that money was now coming back to some areas of the business. However, the bank still experienced net outflows of 110.5 billion Swiss francs in the fourth quarter, taking the annual asset outflows for 2022 to 123.2 billion Swiss francs. The bank's wealth management division alone saw net asset outflows of 95.7 billion Swiss francs in 2022.

In response to the outflows, the bank has embarked on an outreach program, speaking to 10,000 global wealth management clients and 50,000 clients in Switzerland. The CEO expressed confidence that the outreach program and client loyalty would help the bank retain and build on returning inflows. He also stated that the situation has changed completely since January, with the group and its wealth management division globally net positive on deposits.

The bank attributes its poor results to the challenging macro and geopolitical environment, with market uncertainty and client risk aversion having an adverse impact on client activity across all divisions. The bank has taken comprehensive measures to further increase client engagement, regain deposits and assets under management, and improve cost efficiencies.

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