Credit Suisse expects a pre-tax loss of up to 1.5 billion Swiss francs ($1.58 billion) in its fourth quarter as it keeps bleeding cash, the Swiss bank said, shortly before shareholders approved a $4 billion capital hike. | Reuters
The bank said that there had been an outflow equivalent to 6 percent of assets managed by the group at the end of the third quarter. It said this trend in the wealth management division, catering to rich clients, has since improved, but had yet to reverse.
The bank has been battered by a string of scandals and losses, including a $5.5 billion loss from the unravelling of U.S. investment firm Archegos. It also had to freeze $10 billion worth of supply chain finance funds linked to insolvent British financier Greensill. This follows a third-quarter pre-tax loss of 342 million francs and a 1.94 billion franc loss so far this year.Client activity had remained subdued in the wealth management and Swiss Bank divisions, a situation expected to continue in the coming months, the bank said.
The cost of insuring the debt of Credit Suisse against default rose and its bonds came came under pressure after the announcement, which stripped as much as 6 percent off the value of its shares, which have lost almost 60 percent so far this year.
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