Ailing Swiss bank Credit Suisse on Monday reported over 61 billion Swiss francs (over $68 billion) in net asset outflows in the first quarter, when Switzerland's government arranged for its takeover by rival UBS, and said investors are continuing to withdraw assets this month.
The Zurich-based bank cited “significant net asset outflows” as it posted its first-quarter results that were skewed by the rescue plan, which was ordered by Switzerland's financial markets regulator and included the write-down of some 15 billion francs in debt tied up in a particular type of bond.
The takeover by UBS is expected to close in the coming months, and was designed in part to help stabilise the global financial system that had been roiled by the collapse of two U.S. banks.
The reputation of 167-year-old Credit Suisse had been pummeled in recent years over stock price declines, a string of scandals and the flight of depositors worried about the bank's future amid global financial turmoil.
Credit Suisse said the net asset outflows of 61.2 billion francs in the first quarter — the government-arranged rescue plan was hastily announced on March 19 — amounted to about 5 per cent of all of its assets under management. As of Monday, the outflows “have moderated but have not yet reversed,” the bank said.
Credit Suisse said that by March 31, it had net borrowings of 108 billion francs under credit support provided by Switzerland's central bank — guarantees that were a pillar of the rescue plan that helped avoid a possible collapse of the bank.
The turmoil at the bank has simmered down, but last week, U.S. lawmakers accused Credit Suisse of limiting the scope of an internal investigation into Nazi clients and Nazi-linked accounts, including some that were open until just a few years ago.
A week earlier, Switzerland's lower house of parliament issued a symbolic rebuke of the emergency plan spearheaded by the executive branch.