Credit Suisse, Switzerland's second-largest bank, reported its largest annual loss since the 2008 financial crisis on Thursday. The scandal-plagued Swiss banking giant?further expects to fall deeper into the red in 2023, thus sending its?shares tumbling 12%.??
Credit Suisse, which had unveiled a dramatic restructuring plan in October aimed at stopping the rot, reported a net loss of 7.3 billion Swiss francs ($7.9 billion) for 2022.
The Swiss banking giant had lost more than 8 billion Swiss francs during the global financial crisis of 2008, which happened 15 years ago.
In October last year, Credit Suisse announced a plan to lay off 9,000 employees.?Credit Suisse has now also?scrapped its annual bonus for top executives after reporting its worst full-year loss since the 2008 crisis, as per a report in The Guardian.
Citing the impact of restructuring charges and its exit from non-core businesses, Credit Suisse said in a statement that it "would also expect the group to report a substantial loss before taxes in 2023".
At the end of October, the bank unveiled a dramatic restructuring plan aimed at drastically reducing the size of its investment banking unit, which was at the centre of a string of scandals that included the collapse of US fund Archegos.
Those restructuring costs are estimated at around 1.6 billion Swiss francs this year and around one billion francs in 2024, as per an AFP report.
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Credit Suisse's CEO, Ulrich Korner, said the bank had "a clear plan to create a new Credit Suisse."
But its share price plunged on the Swiss stock exchange's main SMI index, down 5.7 percent at 3.066 Swiss francs in morning deals.
In the last quarter, its net loss attributable to shareholders amounted to nearly 1.4 billion Swiss francs¡ªslightly better than expected.
"A weak fourth quarter concludes a terrible 2022,?clearly one of the worst years in Credit Suisse's 167-year history," said Swiss investment managers Vontobel, noting that the bank reported losses in seven out of the last nine quarters.
"2024 might bring a turnaround, albeit with likely still minor profits. The transformation to 'new Credit Suisse' will take time."
Clients withdraw funds - In November, the bank issued a profit warning on restructuring charges, lower activity in the capital markets, and large client withdrawals, saying it expected a loss of up to 1.5 billion Swiss francs.
Credit Suisse recorded net asset outflows of 110.5 billion Swiss francs in the fourth quarter of last year alone.
"We've seen a reversal in January," Chief Financial Officer Dixit Joshi told reporters, explaining that capital outflows were mainly concentrated in October but slowed in December.
As part of its overhaul, Credit Suisse decided to revive its First Boston brand, named after a US investment bank it absorbed in 1990, bringing together its capital market and advisory activities.
On Thursday, as per the report, the bank announced the acquisition of the investment banking business of M. Klein & Company for $175 million, thus taking a step forward in the transformation of its investment banking arm.
Under its revamp, Credit Suisse will refocus on its most stable activities and reduce its merchant banking.
"2022 was a crucial year for Credit Suisse," Korner said.?"We announced our strategic plan to create a simpler, more focused bank, built around client needs and since October we have been executing at pace," the CEO said
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