Swiss financial watchdog reviewing Credit Suisse chairman’s comments on outflows: Sources

ZURICH – Swiss financial regulator Finma is reviewing remarks made by Credit Suisse Group chairman Axel Lehmann about outflows from the lender having stabilised in early December, two people with knowledge of the matter told Reuters.

Finma is seeking to establish the extent to which Mr Lehmann, as well as other Credit Suisse representatives, was aware that clients were still withdrawing funds when he said in media interviews that outflows had stopped, said the two people.

Mr Lehmann told the Financial Times in an interview streamed online on Dec 1 that after strong outflows in October, these had “completely flattened out” and “partially reversed”.

The following day, he told Bloomberg Television that the outflows had “basically stopped”.

Credit Suisse shares rose 9.3 per cent on Dec 2.

The regulator is reviewing whether Mr Lehmann’s statements were potentially misleading, said the people, with one adding that Mr Lehmann may not have been briefed correctly before he made those comments.

A spokesman for Finma declined to comment. A Credit Suisse spokesman said the bank does “not comment on speculation”. Mr Lehmann did not reply to an e-mail seeking comment.

In its annual results reported on Feb 9, Credit Suisse said clients withdrew 110.5 billion Swiss francs (S$160 billion) from the bank in the last three months of 2022.

The outflows reported by Switzerland’s second-largest bank exceeded market expectations and rounded off a weak set of results that led to its stock falling about 15 per cent on the day.

In response to a question on the distribution of withdrawals in the period, chief executive Ulrich Koerner told analysts that day that more than 85 per cent of the outflows in the last quarter happened in October and November, according to a transcript of the call.

This led analysts at Citigroup to conclude in a note to clients that Credit Suisse management effectively indicated that 15 per cent of the outflows had happened in December.

Finma’s scrutiny adds to the challenges faced by Credit Suisse, which has been rocked by scandals in recent years. The lender has embarked on a sweeping overhaul to restore profitability by exiting certain investment banking activities and focusing on managing money for the wealthy.

In early October, a social media storm triggered by an unsubstantiated report about the bank’s financial health

prompted wealthy customers to move deposits elsewhere.

The bank said at the time it was pushing ahead with its restructuring and remained close to its clients.

Responding to a Reuters request for comment on the Feb 9 results, Finma said in a statement that while Credit Suisse’s liquidity buffers had a stabilising effect, the regulator “monitors banks very closely during such situations”, referring to the outflows, which “were indeed significant” in the fourth quarter. It did not elaborate further. REUTERS