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Credit Suisse warns of up to $1.6 billion in losses following client pullouts

Yahoo Finance Live anchors discuss Credit Suisse's warning after the bank's clients have withdrawn money.

Video transcript



RACHELLE AKUFFO: It's time for "Triple Play," the three stocks that we're watching in the final 30 minutes of trading. We have Credit Suisse, Tesla, and AMC on deck. And Jared is joining us for this. Now my pick is the embattled Credit Suisse, ticker CS.

Now the stock under pressure today, down by about 6% there after warning that losses could hit $1.6 billion in the fourth quarter. That's as customers withdrew investments and deposits over concerns about the bank's financial health. They said between September 30 and November 11, outflows were around 6% of its total $1.47 trillion in assets. That's over $88 billion.

Now its wealth management business alone saw nearly $67 billion in outflows. So this comes as the bank is trying to execute a turnaround, especially in operations. According to the Wall Street Journal, that includes a shareholder approved plan to raise more than $4 billion in new stock and selling a large group within its investment bank to try and free up some capital.

But it's an uphill climb, especially after all the social media frenzy over the fraud and money laundering scandals, hefty losses, and some executives leaving led to a lot of comparisons with Lehman. Now a key difference being that Credit Suisse isn't facing the kind of liquidity issues that led to Lehman's collapse. Credit Suisse said that while its liquidity fell below some local level requirements, the required group level liquidity and funding ratios have been maintained at all times. The stock, though, down more than 60% year to date, Jared.

JARED BLIKRE: Yeah, unfortunately, looking at the YFi Interactive-- this is a max chart-- it is trading right at or around historic-- that would be all-time lows. You can see "embattled," I think, is a very apt word, Rachelle, that you used in the intro.