Credit Suisse Q3 net loss mostly due to $3.7B reassessment of deferred tax assets
Credit Suisse (NYSE:CS) posted a net loss for Q3 on Thursday, mostly reflecting a CHF 3.66B ($3.70B) charge related to the reassessment of deferred tax assets as a result of the company's strategic review. Its Q3 net loss of CHF 4.04B widened from a CHF 1.59B loss in Q2 and compared with net income of CHF 484M.
Q3 net revenue of CHF 3.80B rose 4% from Q2 and dropped 30% from Q3 2021. The Y/Y decline reflects lower net revenue in the investment Bank and Wealth Management units.
In Q4, Credit Suisse (CS) expects to record a CHF 75M loss related to its full disposal of its shareholding in Allfunds Group plc. It also expects to incur ~CHF 250M of charges related to its restructuring announced on Thursday. Along with the impacts from exiting its non-core businesses and exposures, the company expects a net loss in Q4 2022.
Q3 net interest income of CHF 1.20B increased 1% Q/Q and dropped 15% Y/Y.
Q3 commissions and fees of CHF 2.13B slid 6% Q/Q and 34% Y/Y.
Q3 total operating expenses of CHF 4.13B fell 13% Q/Q and 10% Y/Y.
Tangible book value per share of CHF 15.22 at Sept. 30, 2022 dropped from CHF 16.29 at June 30.
During the first two weeks of October, following negative press and social media coverage "based on incorrect rumors," Credit Suisse (CS) experienced client asset outflows, primarily in its Wealth Management and Swiss Bank units, at levels that were substantially higher than rates incurred in Q3 2022, it said. Since mid-October, the outflows have significantly reduced but haven't yet reversed. That, along with lower asset values from adverse market movements in client portfolios during Q3 2022 may lead to decreased fee revenue for the company, leading to reduced profitability, it said.
Assets under management of CHF 1.40T at Sept. 30, 2022 dropped 3.7% Q/Q and 14% Y/Y. Net asset outflows of CHF 12.9B in Q3 increased from CHF 7.7B outflows in Q2. By comparison, the firm had CHF 5.6B of inflows in Q3 2021.
CET1 ratio of 12.6% fell from 13.5% in Q2 and from 14.4% in Q3 2021. The company is targeting Group CET1 ratio of more than 13.5% pre-Basel III reform, and at least 13.0% pre-Base III reform in 2023-2025.
Earlier, Credit Suisse to issue $4B of new shares, cut costs by 15% in restructuring plan