The last few days at Credit Suisse were marked by a $69 billion run on exits
Credit Suisse said on Monday that clients had withdrawn nearly $69 billion in the first quarter, underscoring the spiraling problems facing the embattled Swiss bank that forced a fire sale to archrival UBS in March.
In its final financial report as an independent company, Credit Suisse – which lost 1.3 billion Swiss francs, or $1.46 billion, in the first three months of the year – said it had suffered “significant net assets”, particularly in other six months. of March.
These came as investors feared for the health of the troubled 1[ads1]67-year-old lender, sending shares tumbling and forcing the bank to borrow billions from the Swiss central bank to shore up confidence in its finances. Shareholders had been on edge about Credit Suisse for months, worried about its viability amid losses and a string of scandals and financial missteps.
But the Swiss government eventually forced the firm to sell itself to UBS for $3.2 billion. The transaction – the highest-profile banking deal since the 2008 financial crisis – was one of the most drastic attempts to calm markets amid the turmoil sparked by the collapse of Silicon Valley Bank in mid-March.
While client withdrawals at Credit Suisse have since slowed, they have not yet reversed, suggesting that UBS has put work on hold as it prepares to absorb its stricken rival. Meanwhile, Credit Suisse still has 108 billion Swiss francs of debt from the Swiss National Bank, even though it had repaid 60 billion during the quarter.
In Monday’s announcement, Credit Suisse also said it had closed a $175 million deal to buy the boutique investment bank of Michael Klein, a longtime dealmaker and former board member. That acquisition was part of a complicated financial turnaround plan that involved merging Credit Suisse’s investment bank with Mr. Klein’s, ultimately turning the combined business around.
