Credit Suisse Shows Loss of Confidence Over Capital Outflows

By Shubhendra Anand , 12 April, 2023

Credit Suisse was already struggling with a loss of confidence from the clients even before the fall of Silicon Valley Bank and Signature Bank. After many following scandals and investment failures, the Swiss banking economy suffered a huge outflow of assets and deposits under the management in 2022. This happened mostly in the fourth quarter of 2022 while forcing the Swiss group to utilize the liquidity buffers partially.

The concerns over the bank’s stability and efforts for restructuring, clients already withdrew billion dollars in the first few weeks of October. Thus, it resulted in a CHF 138 billion or $149 billion decline in customer deposits by the end of the quarter.

According to the reports, the assets under the management also came down as Credit Suisse reported net asset of CHF 111 billion or $119 billion outflows for the fourth quarter, as the group’s wealth management also saw withdrawal of CHF 93 billion by the clients that is $ 100 billion during the last three months of 2022.

As per the latest annual report published says, the outflows had “stabilized up to much lower levels” but not reversed as per the data. Since banking is game of confidence, this system led to the admission contributing to the rapid demise of Credit Suisse.