Credit Suisse Group AG said that outflows at the bank have continued into this month, even after it started a huge campaign to win back client deposits.
(Bloomberg) — Credit Suisse Group AG said that outflows at the bank have continued into this month, even after it started a huge campaign to win back client deposits.
Outflows of client money, at unprecedented levels in early October, haven’t reversed as of this month, though have stabilized at much lower levels, according to the bank’s annual report released Tuesday. The bank confirmed it had also dipped into liquidity buffers as a result of the withdrawals.
Credit Suisse is battling to shore up confidence among clients, investors and regulators after a series of missteps called into question the lender’s ability to manage risks. The Swiss bank embarked last year on a major shift in strategy while enacting more immediate measures to win back deposits.
The bank is offering deposit rates that are significantly higher than rivals, Bloomberg reported earlier this month. Credit Suisse raised three-month rates to as much as about 6.5% for new money of $5 million and above in Asia, people familiar with the matter have said.
“We want to get back all what we lost,” Chief Executive Officer Ulrich Koerner said at an investor conference hosted by Morgan Stanley on Tuesday. “And once we are there, we go beyond and grow the business again.”
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Outflows have moderated significantly, said Koerner. The CEO said last month that the bank is trying to be “competitive” like many rivals, but that it isn’t “buying assets.”
In November the bank announced outflows of about 84 billion Swiss francs ($92 billion) in the core wealth management business after a social media firestorm about the bank’s financial health spooked clients. While Chairman Axel Lehmann said in early December outflows had “basically” stopped, the total loss of assets rose to 110.5 billion francs in the fourth quarter.
The issue of outflows has been compounded by a string of senior banker departures and is weighing on the bank’s earnings.
Credit Suisse’s annual report also noted that outflows caused it to partially utilize liquidity buffers both at the group and legal entity level. The lender also fell below certain regulatory requirements at legal entity-level, according to the annual report, although the core requirements of the liquidity coverage ratio and net stable funding ratio at the group level weren’t breached.
Credit Suisse has said it expects to make another substantial loss this year as it is in the middle of a complicated restructuring that includes carving out its investment bank and selling off businesses that don’t chime with its key wealth unit. It is also reducing costs by cutting 9,000 jobs.
–With assistance from Steven Arons.
(Updates with details throughout)
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