Credit Suisse hits new low as investors weigh outflow damage

Credit Suisse Group fell to a fresh record low as investors weighed the impact of the massive outflows the bank reported this week and news that rivals in the key growth market of Asia are benefiting from the Swiss firm’s troubles. 

Shares of the lender declined as much as 5 per cent in Zurich on Friday after Vontobel, a Swiss private banking and investment management group, cut its price target and said the firm “urgently” needs to halt outflows in its core wealth management business. The stock has declined for nine days straight, the longest losing streak since 2014. 

Credit Suisse announced on Wednesday that clients had pulled about US$89 billion in the first six weeks of the fourth quarter, with no reversal in sight. Outflows were particularly pronounced in the wealth management unit, where they amounted to 10 per cent of assets under management. 

Rivals including UBS Group and Morgan Stanley are among the beneficiaries of that client exodus, Bloomberg reported Thursday, with both firms seeing significant new business in Asia, a major growth market for wealth management. UBS runs the largest private bank in Asia by assets, excluding onshore China, according to a 2021 ranking by Asian Private Banker, while Credit Suisse is second-biggest.

Andreas Venditti, an analyst at Vontobel, said he was “stunned” by the outflows and predicted Credit Suisse will post another loss next year amid elevated funding costs. He cut his price target for the shares to 3.5 francs (S$5.07) from 4 francs. 

The shares were down 4.5 per cent at 3.39 francs by 3.04 pm in Zurich. BLOOMBERG

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