<p>Credit Suisse (SWX: CSGN) on Wednesday revealed its expectation of a pre-tax loss of up to 1.5 billion Swiss francs ($1.58 billion) for the fourth quarter of the ongoing fiscal. The Swiss banking giant earlier said it was expecting a net loss but did not mention any figure.</p><p>The Swiss financial services giant is now preparing for a massive <a href=”https://www.financemagnates.com/institutional-forex/credit-suisse-plans-to-raise-4b-as-a-part-of-radical-restructure/” target=”_blank”>strategic overhaul</a> and is seeking shareholders’ permission for a $4 billion equity hike.</p><p>”These decisive measures are expected to result in a radical restructuring of the Investment Bank, an accelerated cost transformation, and strengthened and reallocated capital, each of which are progressing at pace,” the bank stated in its Wednesday update.</p><p>The impact of the projected losses can already be seen on the publicly listed stocks of the bank. <a href=”https://www.financemagnates.com/tag/credit-suisse/” target=”_blank”>Credit Suisse </a>stocks plummeted by more than 6 percent, as of press time, since the markets opened on Wednesday.</p><p>Continued Losses</p><p>The latest regressive figures of the Swiss bank came after two consecutive quarters of massive losses: it posted a pre-tax loss of 342 million Swiss francs in the third quarter and 1.59 billion Swiss francs ($1.6 billion) in losses in Q2. The bank even <a href=”https://www.financemagnates.com/executives/moves/credit-swiss-names-ulrich-krner-as-ceo-q2-losses-deepen-to-16b/” target=”_blank”>appointed Ulrich Körner </a>as the new CEO, replacing Thomas Gottstein.</p><p>The bank suffered heavily from constant high litigation costs following several scandals. It also took a $5.5 billion loss from the US investment firm Archegos and had to freeze $10 billion worth of supply chain finance funds linked to Greensill.</p><p>The banking giant even highlighted the ongoing macroeconomic challenges affecting its client activities. It is also expecting subdued client activity in the wealth management division in the coming months.</p><p>”The Investment Bank has been impacted by the substantial industry-wide slowdown in capital markets and reduced activity in the Sales & Trading businesses, exacerbating normal seasonal declines, and the Group’s relative underperformance,” Credit Suisse stated.</p><p>Now, the banking giant is focused on cost-cutting. It aims to reduce 15 percent of its operational costs by 2025 and cut about 1.2 billion Swiss francs of its expenses by the end of 2023.</p><p>”The Group continues to execute on the decisive strategic actions detailed on October 27, 2022, to create a simpler, more focused and more stable bank,” Credit Suisse added.</p>
This article was written by Arnab Shome at www.financemagnates.com.
