Since the end of the third quarter, Credit Suisse experienced a further drop in assets under management. It warns of a loss in its wealth management business. 

Ahead of its extraordinary general meeting later today, Credit Suisse provided its outlook for the fourth quarter in which it said the outflow of deposits and assets continued since the end of the third quarter.

Credit Suisse started experiencing deposit and net asset outflows during the first two weeks of October 2022 at levels that «substantially exceeded» rates seen in the third quarter. At the Group level, net asset outflows were approximately 6 percent of assets under management compared as of November 11, compared to the end of the third quarter, Credit Suisse said in a statement. 

The Swiss unit fared better where client balances stabilized and were approximately 1 percent of assets under management at the end of the third quarter.

Today's EGM seeks shareholder approval for a capital increase, while major investors are pouring capital into the bank, among them Saudi National Bank, which plans to provide 1.5 billion francs which could give it 9.9 percent of the bank. Credit Suisse seeks to attract about 4 billion francs in new capital with the move.

Wealth Management

In the wealth management unit, the outflows were «reduced substantially» from the levels of the first two weeks of October, although have not reversed altogether and were about 10 percent of assets under management at the end of the third quarter. 

Lower deposits and assets under management are expected to result in reduced net interest income. recurring commissions and fees, and is likely to lead to a loss for Wealth Management in the fourth quarter, Credit Suisse said.

Looking Ahead

As previously announced, the bank expects the investment bank and the group to report a «substantial» pre-tax loss in the fourth quarter of up to 1.5 billion Swiss francs for the Group. 

The statement went on to say the group’s actual results depend on a number of factors including the investment bank’s performance for the remainder of the quarter, exiting non-core positions, goodwill impairments, and other outcomes such as other actions, including potential real estate sales.

Confirms Capital Ratio Guidance

The Group confirmed the capital ratio guidance from October 27, targeting a 2025 CET1 ratio of over 13.5 percent, while expecting to maintain a pre-Basel III reform CET1 ratio of at least 13 percent throughout the transformation period in 2023 through 2025.

It also deployed liquidity buffers at the Group and legal entity levels. Although the bank fell below certain legal entity-level regulatory requirements, the core requirements of the liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) at the Group level have been maintained throughout.