Credit Suisse hits new low as investors assess damage from leak

(Bloomberg) — Credit Suisse Group AG fell to a new record low as investors weighed the impact of massive outflows the bank reported this week and news that rivals in the key Asian growth market are taking advantage of the Swiss bank’s woes. company.

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The lender’s shares fell as much as 5 percent in Zurich on Friday after Vontobel cut its price target and said the firm “urgently” needed to stem outflows in its core wealth management business. The stock has fallen for nine straight days, its longest losing streak since 2014.

Credit Suisse said on Wednesday that customers withdrew about 84 billion francs ($89 billion) in the first six weeks of the fourth quarter, with no turnaround in sight. Outflows are particularly pronounced in the asset management unit, where they amount to 10% of assets under management.

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

Read more: Credit Suisse clients flee to UBS in Asia as rich weighting options

Andreas Venditti, an analyst at Vontobel, said he was “stunned” by the outflows and predicted Credit Suisse would post another loss next year amid high funding costs. He cut his price target for the stock to 3.5 francs from 4 francs.

Shares fell 4.5 percent to 3.39 francs by 3:04 p.m. in Zurich.

(Updates share motion throughout.)

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