Credit Suisse's downward slide continued in the second quarter. Assets under management declined further and the takeover by UBS resulted in high costs.
Credit Suisse today reported a pre-tax loss of 8.9 billion francs ($10.1 billion) for the second quarter, with a net loss of 9.3 billion, the bank announced.
Net revenues were minus 528 million francs in the second quarter, down from plus 3.69 billion francs in the year-earlier period. On an adjusted basis, net income was 1.75 billion francs.
Lower Income Everywhere
Assets under management were 16 percent lower year-on-year at 1.21 trillion Swiss francs and 3 percent lower than at the end of March, with a net money outflow of 39.2 billion francs. UBS said that this trend has stabilized. Credit Suisse Wealth Management reportedly received $1 billion in new money in the third quarter through the end of August.
All business units suffered from lower revenues. The decline in net revenues in Wealth Management to 762 million francs and that of the domestic bank to 872 million was primarily driven by lower net interest income, reflecting lower volumes of loans and client deposits. The net loss in the Investment Bank of 84 million francs was due to a significant decline in activity amid uncertainty around the unit and difficult market conditions.
The Corporate Center included funding costs of 540 million francs from tapping the Swiss National Bank's liquidity facilities.
Acquisition-Related Effects
The acquisition, which closed on June 12, had a significant impact on Credit Suisse's results under US GAAP accounting, primarily due to acquisition-related effects not reflected in the adjusted results. These include fair value adjustments of 2.2 billion francs, impairment charges for internally developed software of 1.8 billion, integration costs of 286 million, and a takeover-related compensation expense of 240 million.
Amortization of intangible assets accounted for 38 million Swiss francs and other acquisition-related adjustments for 13 million.
