Credit Suisse bought the Klein Group for $175 million to help spin off its investment banking arm, as it posted another quarterly loss
Shares in the Swiss lender fell 6% and are down 65% over the past year.
The bank indicated further pain ahead. Chief Executive Ulrich Körner said Credit Suisse expects the investment bank to report another pretax loss in the first quarter, and that the group overall would likely post a full-year loss for 2023 because of restructuring costs and business exits. The wealth-management arm’s assets under management slid 27% last year to around $583 billion at Dec. 31, from around $802 billion at the beginning of 2022. The outflows from rich clients had a punishing effect on the bank’s profitability, since those assets are meant to be a source of steady income. The bank earns fees managing the assets and from new transactions.
Under its new strategy, Credit Suisse will divide its investment bank into four parts. In addition to the CS First Boston spinoff, it will keep some markets trading for its wealth clients and is putting a large chunk of assets into a noncore unit. A securitized products group is being sold toThe acquisition of the Klein Group, which was anticipated, has drawn attention because until October Mr. Klein was on Credit Suisse’s supervisory board. Helast summer around the investment bank.
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