German bank becomes latest global lender to target staff in post-pandemic cost reductions
Deutsche Bank is to cut 3,500 jobs, making it the latest global lender to target employees as part of post-pandemic cost reductions, amid a drop in profits.
The German bank said that while it had made progress on a €2.5bn (£2.1bn) cost-cutting programme that it first announced in 2022, it still needed to save €1.6bn of that total, meaning thousands of staff had to go.
Continue reading...Rising interest rates have boosted profitability but are likely to limit demand and increase risk of bad debts, says central bank
The balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late payments by customers, the European Central Bank has warned.
Higher interest rates have boosted banks’ income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.
Continue reading...UBS says it will absorb costs related to litigation, regulatory matters and liability adjustments in emergency rescue
UBS is in line to make an almost $35bn (£28bn) gain after its emergency takeover of Credit Suisse – but has said it will take a $17bn hit from costs related to the rushed rescue deal.
The Swiss lender has said it will make gains of $34.8bn after taking on Credit Suisse, based on an initial assessment of data until the end of last year, according to a regulatory filing. The accounting gain will be one of the biggest ever reported by a bank in a single quarter.
Continue reading...Results reported for what is likely to be the last time as lender’s takeover by Swiss rival nears completion
Credit Suisse said customers pulled more than 61bn Swiss francs (£55bn) worth of assets from the bank at the start of the year, laying bare the scale of the panic that contributed to its failure and emergency takeover by its rival UBS last month.
The Swiss lender said the “significant withdrawals” were partly to blame for its poor financial performance in the first quarter, with its adjusted pre-tax loss ballooning to 1.3bn Swiss francs for the first three months of the year. That compares with a profit of 300m Swiss francs during the same period in 2022.
Continue reading...Finma accused of acting unlawfully and undermining confidence in Switzerland as a financial centre
A group of Credit Suisse investors who lost bonds worth more than CHF 4.5bn (£4bn) are suing Switzerland’s financial regulator over a decision to wipe out risky bank debt after an emergency merger with UBS last month.
The investors filed their claim at a court in St Gallen, in the north-east of Switzerland, weeks after Swiss authorities orchestrated the takeover of Credit Suisse by its larger rival UBS, to try to stem a crisis of confidence in the global banking sector.
Continue reading...Shareholders lash out during final AGM as boss apologises for crisis that led to takeover of lender by UBS
Furious Credit Suisse investors at its final ever annual meeting blocked executive pay plans and called for board members to be “put behind bars”, as the Swiss lender’s chair said he was “truly sorry” over the bank’s demise.
Shareholders used most of the nearly five-hour annual general meeting in Zurich – the last in the 167-year-old bank’s history – to voice fury over poor management, hitting out at excessive pay for “incompetent and greedy” bankers who they said took too many risks and endangered Switzerland’s economic prosperity.
Continue reading...Inquiry to focus on whether emergency state-backed UBS takeover breached criminal law
Switzerland’s federal prosecutor has launched an investigation into whether last month’s state-backed takeover of the stricken bank Credit Suisse by its bigger rival UBS broke Swiss criminal law.
The office of the attorney general said it was looking into potential breaches by government officials, regulators and executives at the two banks who thrashed out an emergency merger over a frantic weekend in mid-March to prevent a wider financial meltdown.
Continue reading...Ulrich Körner acknowledges an ‘emotional and challenging week’ after deal was forced through by Swiss authorities
The chief executive of stricken Credit Suisse has said that he shares its employees’ “profound sadness and disappointment” after its emergency takeover by rival UBS earlier this week.
UBS took over Credit Suisse on Sunday in a £2.65bn deal forced through by Swiss authorities amid fears that a failure to protect depositors would kickstart a global banking crisis.
Continue reading...FTSE 100 rises and European banking shares are up after early jitters over what UBS takeover deal means for bondholders
Stocks climbed on Monday in London and New York after central bankers and politicians sought to soothe jitters triggered by the emergency rescue of Credit Suisse during the weekend.
Central banks in the UK and eurozone issued statements aimed at reassuring investors that – unlike the controversial approach taken by the Swiss authorities in the Credit Suisse deal – their jurisdictions would follow a hierarchy in which equity holders would lose out before bond holders.
Continue reading...Swiss government forces through takeover at well below market value amid fears of global banking crisis
The Swiss government has forced through the takeover of stricken bank Credit Suisse by rival UBS for almost $3.25bn (£2.65bn) – well below its market value – amid fears that a failure to protect depositors would trigger a new global banking crisis.
After a weekend of frantic talks, the Swiss government and the banking regulator brokered a deal once it became clear a $54bn loan to Credit Suisse from the Swiss central bank had failed to halt the precipitous slide in its share price.
Continue reading...Lifelines handed to Swiss bank and US regional bank First Republic fail to ease investor concerns
Credit Suisse shares came under renewed pressure on Friday, despite fresh attempts by central banks and politicians to calm fears about a crisis in the global banking industry sparked by the collapse of two US banks this week.
Shares in Credit Suisse, Switzerland’s second largest bank, fell 8% on Friday despite securing a £45bn emergency loan from the Swiss National Bank just days earlier to shore up its liquidity after a week of panic.
Continue reading...European Central Bank could opt for smaller increase as concerns spread over health of banking system
The European Central Bank is facing a dilemma over whether to push ahead with its plans for a large interest rise on Thursday amid fears over the strength of the banking system after Wednesday’s heavy sell-off of the Swiss banking firm Credit Suisse.
After raising interest rates since last summer at a record pace to tackle high inflation across the eurozone, the ECB had in effect committed to another 0.5 percentage point increase in borrowing costs this week.
Continue reading...After largest shareholder was unable to provide backing, Europe’s 17th largest lender says it will use government help to become ‘simpler and more focused’
Credit Suisse has announced that it will take a CHF50bn ($53.7bn) loan from the Swiss central bank, in an action it says will “pre-emptively strengthen its liquidity” as it moves to stem a crisis of confidence a day after its share price plummeted.
This additional liquidity would support the bank in taking the “necessary steps to create a simpler and more focused bank built around client needs”, its statement said. The bank said it was also making buyback offers on about $3bn worth of debt.
Continue reading...Larry Fink tells investors more ‘shutdowns and seizures’ in US possible and predicts inflation and interest rates to rise
The collapse of Silicon Valley Bank could just be the start of “a “slow rolling crisis” in the US financial system with “more seizures and shutdowns coming”, the chief executive of the world’s largest asset manager has warned.
The CEO of BlackRock, Larry Fink, also predicted in a letter to investors and company bosses that inflation would persist and rates continue to rise, trends that both contributed to SVB’s collapse.
Continue reading...Swiss bank’s shares fall as annual report reveals another blow to its bid to recover from string of scandals
Credit Suisse has said it found “material weaknesses” in its financial reporting controls and that clients were still withdrawing cash, the latest blow to the Swiss bank as it tries to recover from a string of scandals.
The bank’s shares fell as much as 5% on Tuesday, dropping as low as 2.12 Swiss francs – close to the record low on Monday – before recovering some ground to be down 1.7%. Credit Suisse’s bonds also weakened to record lows on Tuesday, after comments in its delayed annual report.
Continue reading...Judge dismisses case against British former trader Tom Hayes, who was jailed over interest rate scandal
A New York court has dismissed a criminal indictment against Tom Hayes, the British former trader at UBS and Citigroup who served five and a half years in a UK prison for rigging the Libor lending benchmark.
Prosecutors in the US filed a motion to dismiss the case against Hayes and another former UBS trader, Roger Darin.
Continue reading...Shake-up aims to draw line under series of scandals and new £3.5bn loss at Swiss bank
Credit Suisse has disclosed sweeping plans to cut 9,000 jobs and raise billions of pounds from investors in a Saudi-led funding round, as part of a company-wide overhaul meant to draw a line under a series of scandals and help it recover from a £3.5bn loss.
The announcement follows months of speculation over the scale of change scheduled under its new boss, Ulrich Körner, who has been tasked with scaling back the investment bank and slashing costs.
Continue reading...Ailing Swiss bank’s share price has collapsed after being hit by series of crises
Credit Suisse, the investment bank whose shares plummeted to record lows this week over fears it could be on the brink of collapse, is selling the five-star Savoy hotel in the centre of Zurich for as much as 400m Swiss francs (£361m).
The bank, whose stock has fallen by more than 40% in the past six months, said on Thursday it had put the 184-year-old hotel on Paradeplatz in the heart of the city’s financial district on the market as part of a regular review of its global real estate assets.
Continue reading...Investors rush to buy credit default swaps as worries grow over solidity of bank’s balance sheet
The cost of buying insurance against Credit Suisse defaulting on its debt soared to a record high on Monday, amid fears on markets about the solidity of the balance sheet at the globally significant Swiss bank.
There was a sell-off in the bank’s shares and bonds while investors rushed instead to buy credit default swaps (CDS) – insurance against the bank failing to meet its debts.
Continue reading...Questions raised over sponsorship of exhibitions by scandal-hit Swiss bank
The National Gallery’s partnership with Credit Suisse has been thrown into question after leaked documents revealed the hidden wealth of the bank’s criminal clients, including drug traffickers, money launderers and corrupt politicians.
Credit Suisse, headquartered in Zurich, has sponsored the National Gallery since 2008 in one of the UK’s biggest arts funding deals. The partnership, renewed in 2020 and due to run until at least 2024, means Credit Suisse’s name is linked to exhibitions for artists from Raphael and Monet to Michelangelo and Leonardo da Vinci.
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