Credit Suisse forecasts a $1.6 billion loss from reclassifying loans related to its non-core and legacy businesses in the third quarter, according to the bank, which is now part of UBS (UBSG.S).
Furthermore, the bank decided to wind down some management agreements, which might result in a loss of up to $600 million in the third quarter of this year, according to a financial report.
In March, UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion) and accept up to 5 billion francs in losses in a rescue arranged by Swiss regulators with the country’s second-largest bank on the verge of failure.
Following the acquisition, UBS has determined which Credit Suisse assets will be retained and which will be placed in a non-core and legacy division that will be phased down over time.
Earlier this month, UBS Vice Chairman Lukas Gehwiler stated that Credit Suisse could incur further losses in the second half of the year.
Credit Suisse also increased its provisions for anticipated legal damages to 1.48 billion Swiss francs.
The result was higher than the 1.367 billion francs announced by the bank in half-year figures at the end of August.
The bank is implicated in a number of issues, including its transactions with the US family office Archegos Capital Management and loans made to Mozambique to help it boost its fishing business.
Credit Suisse reported net asset outflows of 100.3 billion Swiss francs from the end of 2022 in its financial report for the first six months of 2023.
The largest outflow was in the wealth management industry, where 74 billion francs in assets were withdrawn across all regions.
The Swiss domestic business experienced a net outflow of 14.6 billion Swiss francs as clients withdrew funds in fear.
