Credit
Suisse (NYSE:CS), a Swiss banking giant, reported a massive annual loss on Thursday
that missed analyst expectations. According to the financial statement, Credit
Suisse lost CHF 7.3 billion in 2022 compared to CHF 6.53 forecasted by industry
experts.
The fourth
quarter results fell short of projections and were a nail in the lender’s coffin.
The net loss amounted to CHF 1.4 billion, CHF 800 million higher than forecast.
By contrast, the bank at the end of November predicted that the loss for the
last quarter could reach CHF 1.5 billion.
“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,” Ulrich Körner, the Chief Executive Officer of Credit Suisse
Group AG, commented in the financial statement.
It is the bank’s
fifth consecutive quarter of losses, and the report caused the bank’s shares to
slide 10% on Thursday. The problems faced by the lender resulted in a total of
CHF 110.5 billion of capital outflow in 2022. Total assets under management
amounted to CHF 1.3 trillion at the end of the year, falling 20% from a year
earlier.
Körner
admitted in interviews with CNBC and Bloomberg that such results are
“unacceptable” and that by “2024 I think we should be profitable.”
Ongoing Restructuration in
Credit Suisse
The bank
reported an even bigger loss of CHF 3.8 billion in the third quarter of 2022,
mentioning the need for a “radical restructuring.” As part of it, the
lender planned to raise $4 billion of fresh capital, lay off 9,000 people and carve out CS First Boston as an independent investment organization in the US. The job cuts started in January when Credit Suisse went after the European investment bankers.
“From
today, we are taking a series of decisive actions to re-focus Credit Suisse
around the needs of our clients and stakeholders,” Körner promised in
October.
Two weeks
later, the company confirmed that it intended to raise CHF 1.86 billion from
new investors and CHF 2.24 billion from existing shareholders. This is the bank’s
third attempt to recover from its predicament and to defuse the controversy
hanging over it.
For Credit
Suisse, this is the most prominent image crisis in its 166-year history. A
series of recent scandals have severely damaged its reputation, including a
$5.5 billion loss in the collapse of Archegos and settlements of $495 million
imposed in the US and $234 million in France.
Watch the recent FMLS22 panel on regulation trends in 2023.
Credit Suisse Acquires The
Klien Group
On a
positive note, CS has managed to move forward with plans to spin off its
investment bank to create independent US operations, CS First Boston. In a
separate press release, the bank said it has completed the acquisition
Acquisition
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There
Read this Term of The
Klein Group for $175 million.
“We
are very pleased to announce the planned addition of Michael Klein to our
Executive Board through the acquisition of The Klein Group. Michael’s
experience and leadership will further strengthen our Executive Board and will
help create shareholder value through this key strategic step of creating CS
First Boston as an independent global capital markets and competitive advisory
led business,” Axel P. Lehmann, the Chairman of the Board of Directors of
Credit Suisse, commented.
Michael
Klein will assume the position of CEO of Banking and CEO of the Americas and
will also become CEO of CS First Boston. He joins the Supervisory Board and
reports directly to the CEO of the entire Group, Ulrich Körner.
Credit
Suisse (NYSE:CS), a Swiss banking giant, reported a massive annual loss on Thursday
that missed analyst expectations. According to the financial statement, Credit
Suisse lost CHF 7.3 billion in 2022 compared to CHF 6.53 forecasted by industry
experts.
The fourth
quarter results fell short of projections and were a nail in the lender’s coffin.
The net loss amounted to CHF 1.4 billion, CHF 800 million higher than forecast.
By contrast, the bank at the end of November predicted that the loss for the
last quarter could reach CHF 1.5 billion.
“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,” Ulrich Körner, the Chief Executive Officer of Credit Suisse
Group AG, commented in the financial statement.
It is the bank’s
fifth consecutive quarter of losses, and the report caused the bank’s shares to
slide 10% on Thursday. The problems faced by the lender resulted in a total of
CHF 110.5 billion of capital outflow in 2022. Total assets under management
amounted to CHF 1.3 trillion at the end of the year, falling 20% from a year
earlier.
Körner
admitted in interviews with CNBC and Bloomberg that such results are
“unacceptable” and that by “2024 I think we should be profitable.”
Ongoing Restructuration in
Credit Suisse
The bank
reported an even bigger loss of CHF 3.8 billion in the third quarter of 2022,
mentioning the need for a “radical restructuring.” As part of it, the
lender planned to raise $4 billion of fresh capital, lay off 9,000 people and carve out CS First Boston as an independent investment organization in the US. The job cuts started in January when Credit Suisse went after the European investment bankers.
“From
today, we are taking a series of decisive actions to re-focus Credit Suisse
around the needs of our clients and stakeholders,” Körner promised in
October.
Two weeks
later, the company confirmed that it intended to raise CHF 1.86 billion from
new investors and CHF 2.24 billion from existing shareholders. This is the bank’s
third attempt to recover from its predicament and to defuse the controversy
hanging over it.
For Credit
Suisse, this is the most prominent image crisis in its 166-year history. A
series of recent scandals have severely damaged its reputation, including a
$5.5 billion loss in the collapse of Archegos and settlements of $495 million
imposed in the US and $234 million in France.
Watch the recent FMLS22 panel on regulation trends in 2023.
Credit Suisse Acquires The
Klien Group
On a
positive note, CS has managed to move forward with plans to spin off its
investment bank to create independent US operations, CS First Boston. In a
separate press release, the bank said it has completed the acquisition
Acquisition
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There
Read this Term of The
Klein Group for $175 million.
“We
are very pleased to announce the planned addition of Michael Klein to our
Executive Board through the acquisition of The Klein Group. Michael’s
experience and leadership will further strengthen our Executive Board and will
help create shareholder value through this key strategic step of creating CS
First Boston as an independent global capital markets and competitive advisory
led business,” Axel P. Lehmann, the Chairman of the Board of Directors of
Credit Suisse, commented.
Michael
Klein will assume the position of CEO of Banking and CEO of the Americas and
will also become CEO of CS First Boston. He joins the Supervisory Board and
reports directly to the CEO of the entire Group, Ulrich Körner.
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