Credit Suisse Posts Profit In Q1, AuM Down; Sees Loss In Q2, FY23

(RTTNews) - Swiss banking firm Credit Suisse Group AG (CS), which is in deal to be bought by UBS Group AG (UBS), reported Monday that its first-quarter net income attributable to shareholders was 12.43 billion Swiss francs, compared to last year's loss of 273 million francs.

Pre-tax income was 12.76 billion francs, compared to loss of 428 million francs a year ago.

The latest result primarily reflected the write-down to zero of 15 billion francs of additional Tier 1 or AT1 capital notes as ordered by the Swiss Financial Market Supervisory Authority FINMA in light of the planned merger.

Adjusted pre-tax loss was 1.32 billion francs, compared to profit of 300 million francs a year earlier.

Net revenues soared 319 percent to 18.47 billion francs from last year's 4.41 billion francs. Adjusted net revenues were 2.73 billion francs, down 40 percent from 4.58 billion francs in the prior year.

Assets under Management or AuM fell 19 percent to 1.25 trillion francs from 1.56 trillion francs last year.

Credit Suisse said its performance in the quarter was mainly impacted by actions leading up to and stemming from the planned merger between Credit Suisse and UBS Group, which was announced on March 19, and by significant deposit and net asset outflows.

Looking ahead, Credit Suisse expects to report a substantial loss before taxes in the second quarter and fiscal 2023. The outlook reflects the merger announcement, the adverse revenue impact from the previously disclosed exit from non-core businesses and exposures, and restructuring charges and funding costs.

Credit Suisse would also expect the Investment Bank to report a substantial loss before taxes in the second quarter and fiscal 2023.

Further, the reduction in AuM and deposits in the first quarter would lead to reduced net interest income and recurring commissions and fees. In particular, this will likely lead to a substantial loss in Wealth Management in the second quarter.

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