Credit Suisse has been in trouble for years. In fact, at the end of last year, there were rumors of a possible decline.
In October, a rumor spread on social media that a Swiss bank was about to collapse.
It also appeared to cost the firm dearly: In the last three months of 2022, customers withdrew 111 billion Swiss francs ($121 billion) on speculation.
Credit Suisse has since embarked on a sweeping plan to cut 9,000 full-time jobs by the end of 2025. The firm is also divesting its investment bank and focusing more on wealth management.
But last month the Zurich-based lender reported its biggest annual loss since the 2008 financial crisis, underscoring the scale of the challenges it faces.
It lost 7.3 billion Swiss francs ($7.9 billion) in 2022, compared with a loss of 8.2 billion Swiss francs ($8.9 billion) in 2008.
The disappointing results followed a series of mistakes and non-compliances that cost the bank dearly.
For example, the collapse of US hedge fund Archegos Capital Management, a client of Credit Suisse, cost the bank $5.5 billion in 2021. An independent external investigation later found a “failure to effectively manage risk”.
Last year, the bank’s chairman also resigned after a board-ordered investigation into allegations of Covid-19 violations. The inquiry said the focus was on activities, including travel and his personal use of corporate jets.
In recent years, the bank’s reputation has also been tarnished by an espionage scandal that eventually led to the resignation of its former CEO and CEO.
New Deal: Credit Suisse said Wednesday it will borrow up to 50 billion Swiss francs ($53.7 billion) from the Swiss National Bank as it seeks to reassure investors it has the cash it needs to survive. Investors sent shares of the nation’s second-largest lender down 30% on Wednesday.