Credit Suisse (Photo by Credit Suisse)
Credit Suisse reports a net loss of $1.5 billion in the fourth quarter, worse than analysts’ forecasts of a loss of $1.44 billion. The loss in the fourth quarter brought the bank’s losses to huge losses during the year 2022 in the amount of 7.94 billion dollars and this is contrary to the expected loss of 7.11 billion dollars.
The bank estimates that 2023 will also be a year in which large losses will be incurred, with the hope that in 2024 the bank will return to profitability. CEO Ulrich Koerner told CNBC that the full results were “absolutely unacceptable,” but stressed the need for an ongoing multi-year change plan.
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Under pressure from investors, the bank announced in October a plan to simplify and change its business in an effort to return to being stably profitable and this after unimpressive performance at the investment bank and a series of compliance violations.
“We successfully raised $4.35 billion, accelerated the delivery of our ambitious cost targets, and are making strong progress in restructuring our investment bank,” Koerner stated. “We have a clear plan to create a new Credit Suisse and intend to continue to deliver on the three-year strategic transformation by reshaping our investment portfolio, reallocating capital and building on our leading franchise.”
The capital raising included the sale of 9.9% of Credit Suisse’s shares to the Saudi National Bank, making it the bank’s largest shareholder. The Qatar Investment Authority has become the second largest shareholder in Credit Suisse after doubling its stake late last year.
Credit Suisse’s restructuring plan includes the sale of part of the bank’s secured products group (SPG) to the American investment houses PIMCO and Apollo Global Management, as well as the reduction of the investment division by splitting it into capital markets and consulting departments, which will be rebranded as CS First Boston.
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