Swiss bank Credit Suisse said on Monday that 61.2 billion Swiss francs (€62.6 billion or $68.7 billion) in assets left the bank in the first quarter of the year as it rapidly collapsed.
The Swiss government ultimately stepped in and arranged for its takeover by rival UBS, using emergency laws to push the deal through and issue state guarantees for the risk UBS would take on.
The data also showed that capital outflows had continued this month, after the UBS rescue deal was agreeed.
According to the bank, the asset outflows amounted to about 5% of all of its assets under management. Most of the outflows were from its wealth management division and occurred across all regions.
"These outflows have moderated but have not yet reversed as of April 24, 2023," Credit Suisse said.
Assets managed by the flagship wealth management division dropped to 502.5 billion Swiss francs at the end of March, compared to 707 billion francs reported for the same period last year.
Major 'profit' after some bonds written off
Credit Suisse also reported 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 a loss of 428 million francs a year ago.
However, this figure can be mainly explained by high-risk bonds worth around 15 billion francs being written down to zero, benefitting the bank's nominal bottom line but infuriating investors. The step was ordered by Swiss Financial Market Supervisory Authority FINMA as part of the merger, but investors have since launched legal action against the regulator.
The bank also 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.
A week earlier, Switzerland's lower house of parliament issued a symbolic rebuke of the emergency plan spearheaded by the executive branch, voting against the UBS takeover even though it had been pushed through under emergency laws and could no longer be stopped.
Last quarterly report as Credit Suisse?
The takeover of Credit Suisse by UBS is expected to be completed in the coming months, and was designed in part to help stabilize the global financial system that was first rocked by the collapse of two US banks before investors turned their eyes to the Swiss lender's stability.
Looking ahead, Credit Suisse expects to report a substantial loss before taxes in the second quarter and fiscal 2023. However, Monday's quarterly report could be Credit Suisse's last one, depending on how long it takes to finalize the merger.
UBS has already said Credit Suisse would continue to operate under its own name in Switzerland for the foreseeable future, but it plans to scale back Credit Suisse's investment bank.
Swiss media reported that UBS was considering laying off up to 30% of its workforce after taking over Credit Suisse. Prior to the merger, the number of employees at UBS and Credit Suisse was around 72,000 and 50,000, respectively.
