Credit Suisse Reports Huge Q3 Loss

Credit Suisse stock CSGN

Credit Suisse stock tumbles 15% at 3.98 Swiss Francs (CHF) on Zurich Swiss Exchange after the Swiss Bank reported a huge loss for the third quarter. Credit Suisse posted a net loss of CHF 4.034 billion worse than the analysts’ expectations of CHF567.93 million. In the third quarter of 2021, the bank posted a profit of CHF 434 million.

The loss includes an impairment of CHF 3.65 billion related to the new restructuring plan. The bank plans to cut its cost base by CHF 2.5 billion.

Credit Suisse’s revenue was reported at CHF 3.804 billion, well below the CHF 5.437 billion for the same quarter last year. CET1 capital ratio was down 90 basis points quarter over quarter, at 12.6%, including 48 basis points from strategic. CET1 capital ratio was 14.4% in the same quarter last year and 13.5% in the previous quarter. Return on tangible equity was -38.3%, down from -15.0% in Q2 and 4.5% in Q3 of 2021. The proforma CET1 ratio is at 14.0%.

The wealth management division’s pre-tax income dropped 80% to 78 million Swiss francs.

The investment bank division posted a loss of $640 million down from a pre-tax income of $662 million in the third quarter of 2021.

The Swiss Bank division income was down 15% at 383 million Swiss francs.

The Asset Management division posted a before-tax income down 15% at 104 million Swiss francs.

Assets under management at the end of the third quarter stood at CHF 1.4 trillion down from CHF 1.45 trillion at the end of the second quarter. The bank attributes the outflows to market conditions in the Q3, geopolitical tensions, rising inflation and the monetary tightening by the central banks around the world.

Credit Suisse Guidance

The Swiss bank expects a CHF 75 million loss in the fourth quarter due to the disposal of the shareholding in Allfund Plc. above that, the bank expects real estate and software impairments of 250 million Swiss francs.

Credit Suisse Stock Price

Credit Suisse stock trades around CHF 4 and the market capitalization now stands at CHF12.3 billion. The stock has a 52-week trading range between 3.52 to 10.18 Swiss francs. Credit Suisse stock hit an all-time high at 44.30 Swiss francs on February 2011 and hit an all-time low at 3.488 Swiss francs on October 2, 2022.

In a previous article, we covered if Is Credit Suisse too Big to Fail?

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