ZURICH (Reuters) – Credit Suisse bank, now part of UBS, expects to suffer a loss of around $1.6 billion (1.5 billion euros) in the third quarter due to the reclassification of certain loans related to its non-core and legacy activities, the bank said Friday.
It was also decided to terminate certain management agreements, which could lead to a loss of up to 600 million in the third quarter, the bank added in a financial report.
UBS agreed last March to buy its rival Credit Suisse for 3 billion Swiss francs and to assume up to 5 billion francs in losses as part of a merger led by the authorities of the Confederation, forced to intervene and to implement a rescue plan to avoid a crisis of confidence in the financial system.
The Zurich bank subsequently decided which Credit Suisse assets it would keep and which would be placed in a division of non-strategic assets to be liquidated over time.
Credit Suisse, which is involved in several scandals linked notably to the investment company Archegos Capital Management and loans to the fishing industry in Mozambique, also increased its provisions for litigation to 1.48 billion Swiss francs, this which represents an increase compared to the 1.367 billion announced by the bank at the end of August.
In its financial report for the first half of 2023, Credit Suisse also indicates that it has suffered net asset outflows of 100.3 billion Swiss francs since the end of 2022.
The wealth management business was the most affected by this withdrawal of assets, to the tune of 74 billion Swiss francs, while the bank’s domestic activities suffered a net outflow of 14.6 billion Swiss francs in due to the loss of confidence in the brand.
(Reporting by John Revill and Oliver Hirt, French version by Diana Mandiá, edited by Blandine Hénault)
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