Bank Bleedout

Credit Suisse lost an unprecedented 111 billion Swiss francs ($120 billion) worth of assets during the three final months of last year, most of which departed in the run up to the big strategy announcement on Oct. 27. Yet the bank ultimately reported almost 30 billion francs more in outflows by the end of 2022, despite a frantic campaign to call tens of thousands of wealthy clients around the world.

Plans for the carved-out investment bank under ex-Credit Suisse board-member Michael Klein remain vague, and the outflow tide means the core wealth management business has a smaller base from which to earn profits. While the overhaul started in October is, on paper, a three-year process, Thursday’s results show the urgency of the situation facing Koerner and Chairman Axel Lehmann. It’s unlikely that investors will wait that long without results before demanding an even more radical solution.

When Deutsche Bank AG was in similarly dire straits a few years ago, it took the drastic step of chucking out the entire equities trading unit. It also stopped paying dividends for two years and ended up cutting about 7,000 jobs. While the restructuring, which officially ended at the beginning of this year, is widely seen as successful, it owes much to the tailwind it received from a global trading boom and, more recently, rising interest rates.

Credit Suisse’s assets under management have plunged to a six-year low – down CHF 300 billion from a 2016 high of CHF 1632 billion.