Credit Suisse Posts $4B Loss Ahead of Crucial Revamp

Speculation about how the bank plans to address the loss of investor confidence already prompted some clients to cut business in recent weeks. The bank said it “experienced a significant level of deposit and assets under management outflows” in the first two weeks of October, following negative press and social media coverage.

“While these outflows have stabilized since this period, they have not yet reversed,” the bank said in its statement.

The wealth management unit posted a pretax profit of 21 million francs in the quarter, a drop of 95% from a year earlier. Profit was reduced by an impairment of IT-related assets, mark-to-market losses in its financing group in Asia, and litigation provisions.

In the investment bank, fixed-income trading fell 28% in a quarter where peers recorded big gains, and equities trading slumped by more than half. Revenue from arranging stock and bond sales dropped by 89%, reflecting in part a $120 million writedown on leveraged finance positions that also plagued some rivals in the quarter. The business of advising on mergers saw 36% lower revenue.