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Dow Jones Newswires: Credit Suisse shares tumble after flagging $1.6 billion 4Q loss amid strain for wealth management comes

Lower deposits and assets under management are set to lead to reduced net interest income and recurring commissions and fees, which will drag wealth management into a loss in the three months to the end of the year, the Swiss lender said. Read More...

Credit Suisse Group AG shares tumbled in Wednesday morning trading after the bank said asset outflows at its wealth-management business would lead to a fifth consecutive quarterly loss.

Shares CS, -1.45% CSGN, -4.85% at 0830 GMT were down 4.9% to CHF3.66.

The Swiss lender said it expects to post a loss before taxes of around 1.5 billion Swiss francs ($1.58 billion) in the fourth quarter, after lower deposits and assets under management led to reduced commissions and fees.

The bank, Switzerland’s second-largest by assets, said that it net-asset outflows in the quarter to Nov. 11 were around 6%, or $88.3 billion of its total $1.47 trillion assets under management.

At the bank’s wealth-management arm, its key business serving the world’s rich, customers removed $66.7 billion.

It came after the Zurich-based company experienced deposit and net-asset outflows in the first two weeks of October, it said, after social-media reports and a spike in credit-default swaps caused a frenzy over the bank’s financial position.

The bank said the outflows led its liquidity to fall below some local-level legal requirements, but it maintained its required group-level liquidity and funding ratios at all times.

Write to Ed Frankl at [email protected]

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