Crisis-torn Credit Suisse Group AG (NYSE:CS) has revealed that its problems are structural as well as strategic as it warned it would make a whopping US$1.6bn loss in the fourth quarter.
Citing a ‘substantial’ industry-wide slowdown in capital markets, it cautioned that its wealth management division, the anchor of the business, would likely move into the red.
Across the third quarter there has been a 6% outflow in assets under management, the Swiss financial conglomerate confirmed.
It also said, and this was probably less a surprise than the wealth management news, that its investment banking operation is expected to post a ‘substantial loss before tax’ in Q4.
In October, Credit Suisse announced plans to right a group that had been hobbled by a series of self-inflicted wounds.
These plans included a root and branch restructuring, which would involve separating its investment banking operation, thousands of job losses as part of a cost savings drive, and the injection of US$4bn of new capital to stabilise the ailing group.