Credit Suisse saw £55bn pulled from bank in lead-up to collapse

The banking giant suffered a significant “bank run” in late March, prior to the rescue takeover deal by rival Swiss bank UBS.

Credit Suisse has revealed it saw 61bn Swiss francs (£55bn) leave the bank in the first three months of the year as customers rushed to withdraw cash prior to its collapse (Yui Mok/PA) (PA Wire)

Credit Suisse has revealed it saw 61 billion Swiss francs (£55 billion) leave the bank in the first three months of the year as customers rushed to withdraw cash prior to its collapse.

The Swiss financial giant suffered a significant “bank run” as people feared their money was not safe with the struggling company, worsened by the panic caused by the failure of the US’s Silicon Valley Bank.

It led to a subsequent rescue takeover deal by rival Swiss bank UBS in late March, overseen by authorities in Switzerland.

The bank’s wealth management division alone saw some 47 billion Swiss francs (£42 billion) pulled out in the first quarter of the year, having sunk to a loss in the final quarter of 2022.

“Credit Suisse experienced significant net asset outflows, in particular in the second half of March 2023,” it said.

“These outflows have moderated but have not yet reversed as of April 24 2023.”

The bank reported an adjusted loss before tax of 1.3 billion Swiss francs (£1.2 billion) for the period.

Earlier this year, it revealed it had notched up losses of 7.3 billion Swiss francs (£6.6 billion) and had launched a “radical” turnaround plan in a bid to shore up cash, which included sweeping job cuts.

Its total workforce was reduced by about 9% in the third quarter of 2022, the bank said on Monday.

On a reported basis, the bank said it made a pre-tax of income of 12.8 billion Swiss francs (£11.6 billion) in the first quarter.

This primarily reflected the writedown to zero of some 15 billion Swiss francs (£13.6 billion) worth of higher-risk bonds known as Additional Tier 1 (AT1) bonds, it said.

A group of Credit Suisse investors are suing the Swiss financial regulators for allowing the decision to wipe out the bonds, as part of the hurried rescue deal which was pushed through without shareholder approval.

Law firm Quinn Emanuel Urquhart & Sullivan filed the complaint in the Swiss federal court last Wednesday on behalf of investors holding more than 4.5 billion Swiss francs (£4.1 billion) in the higher-risk bonds.

The decision “undermines international confidence in the legal certainty and reliability of the Swiss financial centre”, the law firm said.

Earlier this month, Credit Suisse’s chairman, Axel P Lehman, said he was “truly sorry” to customers, employees and shareholders for not being able to strengthen the beleaguered bank.