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Huge annual loss booked by Credit Suisse bank

Blurred Credit Suisse bank logo
Switzerland's second largest bank has vowed to bounce back to profit via a major restructuring drive © Keystone / Michael Buholzer

Credit Suisse has capped another year of turmoil by reporting an annual loss of CHF7.3 billion ($7.9 billion) for 2022.

This compares with an CHF1.65 billion annual loss in 2021 and a record loss of CHF8.2 billion during the financial crisis in 2008.

+ Where did it all go wrong for Credit Suisse?

The bank cited the “adverse impact” of a “challenging macro and geopolitical environment with market uncertainty and client risk aversion.”

Affluent clients withdrew some CHF123.2 billion of assets from the bank over the course of 2022, pushing the total amounts of assets under management to CHF1.294 trillion – a drop of almost 20%.

Assets managed by the bank’s wealth management business declined 27% from CHF743 billion at the end of 2021 to CHF540 billion last year.

The performance of Credit Suisse’s wealth management business is seen as a key indicator of the bank’s overall health.

+ Read how Credit Suisse plans to turn its fortunes around

Credit Suisse warned that restructuring costs will likely lead to further losses in 2023.

Switzerland’s second largest bank announced a major restructuring drive last October, slashing 9,000 jobs and some of its riskier trading units.

Executives promised to turn around the bank’s fortunes with a renewed focus on its wealth management and domestic facing businesses.

At the same time, Credit Suisse tapped into the financial markets to raise CHF4 billion in fresh capital, mainly from the Middle East.

This follows several years of scandals that have seen significant trading losses, damaging legal cases, a huge leak of client data and several top managers step down.

The most damaging setbacks for its business performance were the billions lost from links to the collapsed Greensill Capital and Archegos Capital Management financial schemes.

This has led to an ongoing overhaul of the bank’s risk culture, which was blamed for ignoring warning signs.

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