Troubled lender Credit Suisse (CS) has reported an annual net loss of 7.3 billion Swiss francs ($7.95 billion U.S.) that was much larger than analysts had expected.
Worse, Credit Suisse said it anticipates another “substantial” full-year loss in 2023 before returning to profitability in 2024.
Last October, the bank that is headquartered in Zurich, Switzerland announced a plan to transform its business.
The transformation is aimed at returning Credit Suisse to profitability following chronic underperformance in its investment banking unit and a series of risk and compliance failures that cost the lender billions in losses.
In November of last year, Credit Suisse projected a 1.5 billion Swiss franc loss for the fourth quarter amid large-scale restructuring expenses.
Credit Suisse shareholders approved a $4.2 billion U.S. capital raise aimed at financing the internal restructuring. The capital raise included the sale of 9.9% of Credit Suisse shares to the Saudi National Bank, making it the lender’s largest shareholder.
Worries about a liquidity crisis led Credit Suisse to experience significant outflows of assets under management in late 2022.
Net outflows at Credit Suisse hit 110.5 billion Swiss francs ($120 billion U.S.) in the fourth quarter, taking the annual asset outflows for all of 2022 to 123.2 billion Swiss francs compared to 30.9 billion of inflows in 2021.
Credit Suisse’s restructuring plans include the sale of part of the bank’s securitized products group, as well as a downsizing of its struggling investment bank through a spin-off of the capital markets and advisory unit, which will be rebranded as “CS First Boston.”
The bank confirmed during its latest earnings release the appointment of Michael Klein as chief executive officer (CEO) of banking and the Americas, as well as CEO of CS First Boston.
Credit Suisse’s stock is down 64% over the last year at $3.58 U.S. per share.
