[Asia Economy New York=Special Correspondent Josel Gina] Customers of Credit Suisse, a Swiss global investment bank (IB) facing a liquidity crisis, are withdrawing funds en masse. The withdrawal amount over the past 43 days alone has reached $88.3 billion (approximately 119.4 trillion KRW). Credit Suisse, which has already recorded losses for four consecutive quarters, is expected to post a deficit of $1.6 billion in the final quarter of this year.
On the 23rd (local time), according to the Wall Street Journal (WSJ) and Bloomberg News, customer deposits withdrawn from Credit Suisse over the 43 days from September 30 to November 11 are estimated at $88.3 billion. This accounts for about 6% of Credit Suisse's total deposits of $1.47 trillion.
In particular, these withdrawals were prominent in the core business area of asset management. WSJ reported that withdrawals from the 'super-rich' asset management sector amounted to $66.7 billion. Bloomberg News stated, "We are experiencing a historic outflow of funds," and added, "These asset outflows are continuing."
Concerns surrounding Credit Suisse have not easily subsided. After recording losses exceeding $5 billion due to the margin call incident involving Korean-American investor Bill Hwang's Archegos Capital last year, Credit Suisse has posted losses for four consecutive quarters through the third quarter of this year. As deposits and assets under management shrink, fee income has decreased, and a loss close to $1.6 billion is expected in the fourth quarter as well. Major foreign media outlets have also reported that insurance premiums against default have increased.
On this day, analysts from JPMorgan Chase, Jefferies, and others pointed out that the outflow of funds from Credit Suisse's asset management division is much larger than expected and that more measures are needed to restore investor confidence.
However, Credit Suisse stated that although liquidity at some branches has fallen below local legal requirements due to recent fund outflows, the group-level essential liquidity and funding ratios are being maintained.
Earlier, Credit Suisse received approval from shareholders for a capital increase plan of $3 billion. This is part of self-help measures including restructuring and asset sales. The Saudi National Bank secured a 9.9% stake in Credit Suisse, becoming the largest shareholder.
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