Credit Suisse posted improved results in the first quarter of 2023, driven by the recent wipeout of its AT1 bonds.
Due to the forced write-down of its AT1 bonds by Finma, Credit Suisse posted net income attributable to shareholders of 12.4 billion francs ($13.9 billion), according to first quarter results released today, three days earlier than initially planned. Accounting for that and other factors, it booked a pre-tax loss of 1.3 billion francs.
Pre-tax income was further impacted by 700 million francs in gain from the sale of the Securitized Products Group, a goodwill impairment of 1.3 billion francs, the bulk of which was in wealth management.
Credit Suisse had planned to publish its quarterly figures next Thursday, but moved them up to Monday at short notice. Presentations for media, analysts, and investors will no longer be held by the money house after the emergency bailout by Swiss rival UBS.
Billions More in Client Funds Leave
Credit Suisse reported it suffered a further 61.2 billion francs in client fund outflows in the first quarter, coming on top of the 110.5 billion francs that clients took out in the fourth quarter. Overall assets under management fell to 1.25 trillion francs from 1.29 trillion francs at the end of last year.
UBS will disclose its figures on Tuesday and provide information on its business performance and with the report being gleaned for clues on the integration process with Credit Suisse.
Goodwill Impairment
A review of the Group's financial plans of deposit and AUM outflows in the first quarter concluded the estimated fair value of the wealth management unit was below its carrying value which resulted in 1.3 billion francs of goodwill impairment, resulting in a goodwill balance of zero.
Merger Effects
With the merger with UBS, the adverse revenue impact from the previously disclosed exit from non-core businesses and exposures, restructuring charges, and funding costs, Credit Suisse expects the investment bank and the group to report a substantial pre-tax loss in the second quarter and the full year.
Actual results depend on several factors, including the performance of the investment banking and wealth management divisions, deposit and net asset flows, the continued exit of non-core positions, goodwill, software, and other impairments. In addition, there are litigation, regulatory actions, credit spreads, and related funding costs, the usage and availability of the SNB liquidity facilities, and the impact of continued voluntary and involuntary employee attrition, it said.
UBS will disclose its figures on Tuesday and provide information on its business performance and with the report being gleaned for clues on the integration process with Credit Suisse.
