Credit Suisse lost $68 billion in assets last quarter, outflows continue amid takeover by UBS

Credit Suisse on Monday revealed that it saw net asset outflows of $68 billion in the first quarter, further adding that outflows were still continuing. This comes at a time when its rival UBS is set to take over the bank.

In its first quarterly results, the Zurich-based bank said that it witnessed significant withdrawals of cash deposits along with non-renewal of maturing time deposits. The bank reported that customer deposits saw a downfall by 67 billion Swiss francs in the first quarter. 

This comes after UBS agreed to buy rival Credit Suisse for $3.23 billion in stock, and assume up to $5.4 billion in losses and takeover is expected to happen soon.

The deal inked between UBS and Credit Suisse last month includes $108 billion in liquidity assistance for UBS and Credit Suisse from the Swiss central bank. The federal government is providing a loss guarantee of a maximum 9 billion Swiss francs to enable UBS take over Credit Suisse. 

Meanwhile, the assets managed by Credit Suisse's flagship wealth management division fell down to 502.5 billion francs at the end of March, as against 707 billion reported for the same period last year. The collapse of Silicon Valley Bank and Signature Bank tarnished the reputation of Credit Suisse as the clients started withdrawing large sums of money out of panic. 

Credit Suisse further added that the net asset outflows of 61.2 billion francs in the first quarter " the government-arranged rescue plan was hastily announced on March 19 " resulted in bringing all of its assets under management to about 5 per cent. The bank said that the outflows "have moderated but have not yet reversed.”

Meanwhile, UBS’ Vice Chairman Lukas Gaehwiler said at the bank’s annual general meeting that Credit Suisse would continue to operate under its own name in Switzerland for the foreseeable future.

Gaehwiler further added that they have not decided what to do with Credit Suisse’s domestic business. UBS is also not clear about the possible job cuts after the takeover takes place.

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