Credit Suisse suffers worst loss since 2008 as anxious clients fled

Scandal-plagued bank Credit Suisse posted its worst annual loss since the financial crisis in 2008 as anxious clients fled.

The lender posted a loss of £6.5billion for 2022 – its second year in a row in the red – and warned of another big deficit in 2023.

It saw a sharp acceleration in clients pulling out funds, with outflows hitting £100billion in the fourth quarter alone, although the bank said the picture was improving.

In the red: Credit Suisse posted a loss of £6.5bn for 2022  and warned of another big deficit in 2023

The scale was described as ‘staggering’ by Thomas Hallett, an analyst at Keefe, Bruyette & Woods said the banking giant’s performance was ‘even worse than feared’. 

He said: ‘With heavy losses to continue in 2023, we expect another wave of downgrades and see no reason to own the shares.’

The bank said: ‘Our financial results for 2022 were significantly affected by the challenging macro and geopolitical environment with market uncertainty and client risk aversion. Credit Suisse would also expect the group to report a substantial loss before taxes in 2023.’

Its shares fell 15 per cent yesterday.

Vontobel analyst Andreas Venditti said 2022 was one of the worst years in Credit Suisse’s 167-year history.

Ethos Foundation, which represents Swiss pension funds that own shares in the bank, described the results as ‘catastrophic’.

Credit Suisse has faced a series of scandals over the last couple of years including multi-billion pound hits related to the collapses of US investment firm Archegos and British supply chain finance firm Greensill Capital. 

It was convicted in a money laundering case in Switzerland and, late last year, a frenzy of speculation about its financial health rattled confidence.

Much of the outflows from the bank happened around then.

Its wealth management division accounted for the bulk of the funds that were pulled out, with £83billion withdrawn in the fourth quarter.

The investment bank made a loss of £3.4billion for the year, roughly the same sum as it paid to its staff.

Overall performance was mainly driven by ‘significantly lower’ revenue in the investment banking division amid an ‘industry-wide slowdown in capital markets’, it claimed.

The group, Switzerland’s second biggest lender, is cutting costs and jobs as it seeks to revive its fortunes. 

It completed a £3.6billion fundraising in December, with Saudi National Bank, which holds a stake of about 10 per cent, a key investor.

The shake-up includes spinning off its investment bank under the CS First Boston brand.

Chief executive Ulrich Koerner said: ‘We have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation.’

He said it had done ‘prudent and also hopefully somewhat careful planning’.

Credit Suisse has scrapped its annual bonuses for top executives, who include the chief executive.

And it cut the bank’s overall bonus pool by 50 per cent compared with last year.