Banking giant Credit Suisse is seeing its financial health continue to deteriorate sharply. Since the beginning of October, 10% of assets in custody have been withdrawn by clients. What raise questions about the long-term viability of the institution.
Clients are fleeing Credit Suisse
Rumors were swirling on social media, and they were confirmed. In less than three months, these are $88 billion that came out of Credit Suisse. Unheard of for the banking giant, which issued a third press release in the form of a warning regarding its financial health. In the fourth quarter, the expected loss could reach 1.5 billion Swiss francs.
To cope with the exodus of its customers, Credit Suisse was forced to dip into its liquidity reserves. And the trend has only been confirmed in recent weeks, according to the press release:
“Credit Suisse began to experience net asset and deposit outflows in the first two weeks of October 2022, at levels which significantly exceed those of the third quarter of 2022.»
Overall, Credit Suisse saw 10% of its assets under management soar, or 63 billion Swiss francs out of the 88 billion lost by the group as a whole. This type of monumental loss is usually seen in whole years of crisis. That they occur in such a short time shows the considerable danger in which the financial institution finds itself.
👉 To go further – Could Credit Suisse be the Celsius of traditional finance?
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An emergency meeting and an upcoming restructuring
Credit Suisse shareholders gathered on Tuesday to vote. It was decided to raise 4 billion dollars from investors, in order to completely restructure the group to save it from bankruptcy. Last month, the bank had already announced drastic measures. It had dismissed thousands of employees, detached its investment branch and mentioned this fundraising which has just been voted.
All of this does nothing to support the CSGN stock price, which continues its fall started in the middle of the month :
Credit Suisse shares continue to slide
Will the government have to intervene to bail out Credit Suisse? This is of course a possibility, as the institution weighs heavily at the local and global level. We can draw a parallel with the fall of FTX, the cryptocurrency exchange having also seen massive withdrawals occur as rumors of insolvency spread. Except that for Credit Suisse, a possible collapse would have far more serious consequences.
👉 To read on the same subject – Tax fraud: Credit Suisse pays 238 million euros to escape prosecution in France
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Published by Editions Larousse
Source: Financial Times – Chart: TradingView
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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