Credit Suisse on Wednesday projected a 1.5 billion Swiss franc ($1.6 billion) fourth-quarter loss as it undertakes a massive strategic overhaul.
"Together with the adverse revenue impact from the previously disclosed exit from the non-core businesses and exposures, and as previously announced on October 27, 2022, Credit Suisse would expect the Investment Bank and the Group to report a substantial loss before taxes in the fourth quarter 2022, of up to CHF ~1.5 billion for the Group," the bank said.
"The Group's actual results will depend on a number of factors including the Investment Bank's performance for the remainder of the quarter, the continued exit of non-core positions, any goodwill impairments, and the outcome of certain other actions, including potential real estate sales." Credit Suisse confirmed that it has begun working toward the targeted 15%, or 2.5 billion Swiss francs, reduction of its cost base by 2025 with a targeted reduction of 1.2 billion Swiss francs in 2023. Layoffs of 5% of the bank's workforce are underway alongside reductions to "other non-compensation related costs."
The bank announced last week that it would accelerate the restructure of its investment bank by selling a significant portion of its securitized products group to Apollo Global Management, reducing SPG assets from $75 billion to approximately $20 billion by the middle of 2023. "These actions and other deleveraging measures including, but not limited to, in the non-core businesses, are expected to strengthen liquidity ratios and reduce the funding requirements of the Group," it said Wednesday.
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