According to Credit Suisse, which is now a part of UBS, the bank anticipates a third quarter loss of around $1.6 billion due to the reclassification of loans related to its non-core and legacy businesses.

The bank said in a financial report that a decision was also made to wind down some management arrangements, which might cause a loss of up to $600 million in the third quarter of this year.

In a rescue operation led by Swiss authorities with Switzerland’s second-largest bank on the verge of failure, UBS and Credit Suisse reached an agreement in March to buy each other for a discounted price of 3 billion Swiss francs ($3.3 billion) and to take on up to 5 billion francs in losses.

After the acquisition, UBS has selected which assets from Credit Suisse it would keep and which ones will be put in a non-core and legacy division to be shut down gradually.

Lukas Gehwiler, vice chairman of UBS, stated earlier this month that it was feasible for Credit Suisse to incur further losses in the second half of the year.

Additionally, Credit Suisse increased its reserve for anticipated legal damages to 1.48 billion Swiss francs.

The amount increased from the 1.367 billion francs the bank reported at the end of August in half-year numbers.

The bank is implicated in a number of issues, including those involving its interactions with American family office Archegos Capital Management and loans given to Mozambique to help the country’s fishing industry grow.

Credit Suisse also reported net asset outflows of 100.3 billion Swiss francs starting at the end of 2022 in its financial report for the first half of 2023.

The wealth management industry experienced the largest outflow, with assets moved out totaling 74 billion francs from all areas.

Due to the loss of client confidence in the bank and the frantic withdrawal of funds by clients, the domestic Swiss company had a net outflow of 14.6 billion francs.

(Adapted from Nasdaq.com)

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