Credit Suisse (CSGN) Slumps as Asset Outflows Continue

Credit Suisse stock CSGN

Update 11-29-2022 – Credit Suisse (CSGN) stock continues lower for the tenth consecutive day of losses hitting record lows as investors dumped the right to participate in the upcoming capital raise to support the bank’s capital base.

Credit Suisse (CSGN) stock slumps close to an all-time low on Wednesday as the Swiss bank warns of a bigger than expected loss in the current quarter due to continuous net asset outflows.

Credit Suisse now forecasts a CHF 1.5 billion loss in the fourth quarter despite the announcement of some restructuring measures in the previous month. The bank in the Q3 earnings report communicates a forecast for CHF 75 million loss in the fourth quarter.

Credit Suisse works towards a 15% reduction in its cost base while planning to layoff off 5% of its workforce.

The continuous net asset outflows have reduced the income from fees and commissions. The outflows reached almost 6% or $88.3 billion of assets under management in the first month of the Q4 due to the panic in the media in early October as the bank’s credit default swap rose to sharply.

The outflows have deteriorated the bank’s liquidity position, and analysts are looking for problems in meeting the Swiss banking’s tough requirements.

Credit Suisse (CS) reported a huge loss in Q3 disappointing analysts and investors. The Swiss mega-bank posted a net loss of CHF 4.03 billion well below the analysts’ expectations of CHF 567.93 million. In the Q3 of 2021, the bank posted a profit of CHF 434 million.

Credit Suisse (CSGN) shareholders approved a CHF 4 billion capital raise

The shareholders earlier today approved a CHF 4 billion capital raise to support the bank’s capital base. Saudi National Bank (SNB) will buy a 9.9% stake in CSGN, making it the largest shareholder.

As of writing Credit Suisse (CSGN) stock is trading 4.28% lower at 3.66. The Credit Suisse (CSGN) stock hit an all-time low on October 2, 2022, at CHF 3.488. Credit Suisse’s market capitalization is now at CHF 10.16 billion.

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