Statements by the bank's management on the outflow of client funds drew the attention of supervisory authorities. Now there is a new water level report from Credit Suisse on the sensitive topic.
Anyone looking for this price-sensitive information will have to dig deep into Credit Suisse's annual report published Tuesday. Under the topic of liquidity risks, the relevant passage indicates that «outflows stabilized to much lower levels but had not yet reversed as of the date of this report.»
Early in the fourth quarter of last year Credit Suisse began experiencing significantly higher withdrawals of cash deposits, while maturing time deposits were not being renewed, according to the report.
As finews.com also reported, over 120 billion francs in assets left Credit Suisse last year, the bulk of which, 110 billion francs, was in the fourth quarter. Of that amount more than three-quarters were in the core business with asset management (wealth management).
Statements by Credit Suisse Chairman Axel Lehmann in December that the outflows stopped have this year brought the Swiss Financial Market Supervisory Authority (Finma) down on the bank. The regulator recently announced that Lehmann's proclamations didn't lead to false assumptions in the financial market. In any case, with today's news, the December figures are no longer valid and the bank is still struggling with outflows.
Exiting Bank Stocks
The question now is whether that movement will slow down or accelerate. Given the uncertainty surrounding banking stocks due to a brewing crisis in the US, the stock price of Credit Suisse is again under pressure. On Tuesday, the shares fell by more than four percent and are currently trading at 2.163 francs per share, just above the all-time low. This could trigger further flight movements among wealth management's rich private clients.
The first quarter also traditionally sees large investment mandates from institutional clients. It remains to be seen how many of these will remain loyal to Credit Suisse through the latest turbulence.
