Over $68 billion was drained from Credit Suisse before its bailout - Europe

2023-04-24 14:14:00

More than 68 billion dollars have left the Swiss bank “Credit Suisse” in the first months of the year – a crisis that led to the need to rescue it.

61.2 billion Swiss francs ($68.6 billion) were withdrawn, according to the latest financial results published on Monday.

Its forced sale to rival Swiss bank UBS is expected to close soon.

As a result of the loss of funds, the bank’s assets under management fell by 502.5 billion francs at the end of March, almost 29% less than the same period last year, the BBC reports.

Credit Suisse’s clients began withdrawing money from the bank after it was dragged into the market turmoil that followed the collapse of US banks Silicon Valley Bank and Signature Bank in March.

In Switzerland, the authorities put together a rescue package for Credit Suisse for more than 200 billion francs in financial guarantees, and it was agreed that UBS would buy out its struggling rival.

Credit Suisse has been loss-making and has faced a series of problems in recent years, including allegations of money laundering.

It posted a loss of 7.3 billion Swiss francs in 2022 – the worst year since the 2008 financial crisis – and warned it did not expect to return to profit before 2024.

The bankruptcy of Silicon Valley Bank and Signature Bank in the US came after the value of their holdings plummeted as a result of rising interest rates.

Bank shares around the world fell sharply on worries that other lenders could face similar problems, and investors rushed to pull their money out of the already struggling Credit Suisse.

Swiss prosecutors have launched an investigation into the sudden acquisition of Credit Suisse, which was the country’s second largest bank.

The deal angered taxpayers and shareholders of the two banks, who were denied a vote in the acquisition. Some also argue that it has damaged Switzerland’s global reputation as a financial center, writes the BBC.