Clients withdrew £55bn from Credit Suisse

Credit Suisse has suffered from substantial customer withdrawals, which have not yet reversed, after it was caught up in the market turmoil following the collapses of US banks Silicon Valley and Signature Bank in March. The bank had already faced a string of issues in recent years, including money laundering charges, and it reported a loss of 7.3bn Swiss francs in 2022, its worst year since the financial crisis of 2008. It had warned it did not expect to be profitable until 2024.

Following the outflows, the Swiss authorities put together a rescue package for Credit Suisse. The package included more than 200bn francs of financial guarantees and saw UBS agree to take over Credit Suisse. However, Swiss prosecutors have now opened an investigation into the sudden takeover, which has angered taxpayers and shareholders of both banks.

Frances Coppola, an independent banking analyst, said that Credit Suisse had also seen billions withdrawn in the final three months of 2022, and that banks do not survive outflows like that, however big they are. Shanti Kelemen, chief investment officer at M&G Wealth Investments, said that given the bank’s size, the outflows were going to be a big number. She added that the deal with UBS has confirmed the extent of the problem.

The failures of Silicon Valley Bank and Signature Bank in the US came after the value of assets they held fell sharply due to rising interest rates. This caused banking shares around the world to fall sharply amid worries that other lenders might face similar problems, and investors rushed to pull their money out of Credit Suisse. Since then, concerns about other banks have eased, but Coppola warned that more banking turbulence could be on the way.