The asset management division of Credit Suisse has recorded net outflows of CHF11.6bn, or 3% of total assets under management of CHF1.3trn, in the first quarter of this year which was marked by the emergency takeover by rival UBS.
The outflows were particularly from traditional investments, such as fixed income, index solutions, alternative investments and credit products, according to the bank’s first quarter results published yesterday.
Net revenues in the bank’s asset management division decreased 45% quarter-on-quarter in Q1 to CHF187m, from CHF261m in Q4 2022, and CHF339m in Q1 one year ago, the statement added.
The negative result recorded in the last quarter in terms of net revenues was caused by lower income generated by investments and partnerships, and lower management fees, partially offset by higher performance and transaction revenues, it added.
Pre-tax losses in asset management stood at CHF31m in Q1, compared with CHF28m in the fourth quarter of last year, and pre-tax income of CHF57m in Q1 one year ago.
Credit Suisse recorded total net asset outflows of CHF61.2bn in the first quarter of the year, equalling to 5% of total assets as of the end of 2022, with deposit outflows representing 57% of wealth management and Swiss bank net asset outflows.
Outflows in the wealth management division stood at CHF47.1bn in Q1, equaling to 9% of total assets, driven by outflows across all regions, wit net revenues down by 33% compared with Q1 2022, and pre-tax loss of CHF115m.
The Swiss bank saw net asset outflows of CHF6.9bn in the last quarter, mainly caused by outflows in private client business.
The lender saw significant net asset outflows in the second half of March, when UBS announced the acquisition after liquidity assistance provided by the Swiss National Bank with the backing of the Swiss government.
The net amount of borrowings under the credit facilities amounted to CHF108bn after repayments of CHF60bn during the quarter, with further repayments of CHF10bn done on April 24, according to the financial statement.
Credit Suisse’s common equity tier 1 ratio (CET1) increased to 20.3% as of the end of Q1 2023, up from 14.1% at the end of Q4 2022. The increase in CET1 capital was mainly driven by the write-down of the AT1 capital notes as ordered by the Swiss Financial Market Supervisory Authority, FINMA.
Swiss and international investors are suing FINMA for its decision to write down Credit Suisse AT1 Bonds as a result of the takeover by UBS.
A spokesperson for Credit Suisse said that for asset management, despite outflows in the three months to 31 March 31, total assets under management were broadly flat quarter-on-quarter – CHF399bn against CHF402bn – thanks to robust investment performance.
For the group as a whole, as of 24 April 2023, outflows had moderated, though not yet reversed, the spokesperson added.