Business Maverick: Credit Suisse Sinks as Path to Profits Keeps Getting Steeper

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Credit Suisse Group AG posted a bigger-than-expected loss for the fourth quarter and unprecedented client outflows, exacerbating the difficulty for Chief Executive Officer Ulrich Koerner in returning to profitability by next year.

Shares in the Swiss bank slid as much as 12% on Thursday after it posted a fifth-straight quarterly loss of 1.39 billion Swiss francs . While outflows were concentrated in a hectic two-week period in October, the full scale of the exodus — 110.5 billion francs — still surprised analysts.

Koerner’s pledge to stem the decline hinges on a massive client outreach program to woo nervous clients and their cash back to the bank, while carving out the volatile investment bank and slashing costs. On Thursday, Credit Suisse reported progress in the steps needed to execute the plan, including the purchase of dealmaker Michael Klein’s boutique advisory firm, but only tentative signs that customer confidence is returning.

By “2024 I think we should be profitable,” Koerner said in an interview with Bloomberg Television’s Francine Lacqua. “2023 will be a transformative year, and then we get better and better,” he said. Koerner detailed the bank’s efforts to win funds back, reaching out to tens of thousands of clients following the October surge, with management “hopeful that we bring a fair part of the outflow back in 2023 and the rest will come later.”

 

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