ZURICH (Reuters) -Credit Suisse expects to make a third quarter loss of about $1.6 billion from reclassification of loans linked to its non core and legacy businesses, the bank, which is now part of UBS, said on Friday.
In addition, a decision was made to wind down certain management arrangements, which may result in a loss of up to 600 million in the third quarter of this year, the bank added in a financial report.
UBS agreed on March 19 to buy Credit Suisse for a knockdown price of 3 billion francs and up to 5 billion francs in assumed losses in a rescue orchestrated by Swiss authorities with Switzerland’s second-largest bank on the edge of collapse.
Following the takeover, UBS has decided which Credit Suisse assets it will retain and which will be placed in a non-core and legacy division to be wound down over time.
UBS’s Vice-Chairman Lukas Gehwiler said earlier this month it was possible that Credit Suisse could generate further losses in the second half of the year.
In the financial report for the first six months of 2023, Credit Suisse said its suffered net asset outflows of 100.3 billion Swiss francs ($109.83 billion) from the end of 2022.
The biggest outflow happened in the wealth management business, where 74 billion francs in assets was withdrawn, with money being withdrawn across all regions.
The Swiss domestic business suffered a net outflow of 14.6 billion francs as confidence collapsed in the bank and panicked customers withdrew funds.
($1 = 0.9132 Swiss francs)
(Reporting by John Revill, Editing by Rachel More)
