Credit Suisse Reports Huge Loss as It Seeks to Revive Fortunes

Credit Suisse on Thursday reported its biggest loss since the 2008 financial crisis, and warned of another “substantial” loss this year, as the beleaguered Swiss bank struggles to revive itself by refocusing on fewer business lines.

It is an ominous omen for Credit Suisse, a 167-year-old icon of Swiss banking that has lurched from crisis to crisis over the past two decades, including losses tied to the housing market, trading disasters, management upheaval and costly legal settlements. It has lost money in five of the last eight years.

In October, Credit Suisse announced a sweeping plan to shrink itself, focusing mainly on managing the fortunes of wealthy clients and spinning out its investment bank, abandoning a decades-long effort to compete with Wall Street giants in deal-making and trading. The bank is also laying off thousands of employees.

Last year was “extremely challenging,” Ulrich Körner, the bank’s chief executive, told analysts on a call. “Nonetheless, it was also a year which marked the beginning of the important and necessary transformation for our organization.”

Credit Suisse lost 7.3 billion Swiss francs, or nearly $8 billion, last year, far more than the 1.7 billion Swiss francs it lost in 2021 and the most since a 10 billion-plus Swiss franc shortfall in 2008. Its net revenue last year also shrank by 34 percent. Steep restructuring charges would lead to another “substantial” loss this year, the bank said.

Customers withdrew 110.5 billion Swiss francs’ worth of assets from the bank in the fourth quarter, a bad sign for the division that the bank is betting its future on. Credit Suisse said most of those withdrawals came in October, amid frenzied speculation about the firm’s health, before tapering off later in the year. That stands in contrast with UBS, which reported a rise in profit last year and touted gains in assets under management — some of which came from customers switching from its Zurich-based rival.

Credit Suisse also announced the next step in its reorganization on Thursday, saying it would buy the boutique investment bank run by Michael Klein, a veteran deal-maker who helped devise the bank’s restructuring plan, for $175 million.

Mr. Klein is set to become chief executive of the spun-out investment bank, which will be called CS First Boston, reviving the name of a storied Wall Street firm that the Swiss bank acquired in 1988.