ZURICH (Reuters) -Credit Suisse expects to make a pre tax loss of up to 1.5 billion Swiss francs ($1.58 billion) during its fourth quarter, the embattled Swiss bank said on Wednesday, as it prepares to ask shareholders for permission to raise new equity.
“In its outlook statement on October 27, 2022, the bank highlighted that the challenging economic and market environment has had an adverse impact on client activity across its divisions,” Switzerland’s second-largest bank said.
“In particular, the Investment Bank has been impacted by the substantial industry-wide slowdown in capital markets and reduced activity in the Sales & Trading businesses, exacerbating normal seasonal declines, and the Group’s relative underperformance,” the bank added.
Client activity remains subdued in the Wealth Management and Swiss Bank divisions, and the bank expects these market conditions to continue in the coming months.
Also, cash outflows had accelerated at the start of its fourth quarter, the bank said.
At the group level, as of Nov. 11, net asset outflows were around 6% of assets under management at the end of the third quarter.
In Wealth Management, outflows have reduced “substantially” from the high levels of the first two weeks of October, though they have not yet reversed, and were around 10% of assets under management at the end of the third quarter of 2022.
Credit Suisse is due to hold an Extraordinary General Meeting later on Wednesday where it will seek approval for a 4 billion Swiss franc capital increase to fund its overhaul.
($1 = 0.9507 Swiss francs)
(Reporting by John Revill; Editing by Paul Carrel and Maria Sheahan)
