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Credit Suisse’s final days marked by $69 billion exit race

Clients withdrew nearly $69 billion in the first quarter, Credit Suisse said on Monday, underscoring the escalating troubles facing the struggling Swiss lender that forced a sale to archrival UBS AG in March.

Credit Suisse, which posted a loss of 1.3 billion Swiss francs ($1.46 billion) in the first three months of the year, said in its final financial report as a stand-alone company that it had suffered “substantial net asset outflows”, especially in the second half of March.

Investors worried about the health of the troubled 167-year-old lender sent its shares tumbling and forced the lender to borrow billions of dollars from the Swiss National Bank to boost confidence in its finances. Shareholders have been jittery about Credit Suisse for months, concerned about its ability to survive losses, a series of scandals and financial blunders.

But the Swiss government ultimately forced the company to sell itself to UBS for $3.2 billion. The deal, the most high-profile bank deal since the 2008 financial crisis, is one of the most furious efforts to calm markets amid the turmoil sparked by the collapse of a Silicon Valley bank in mid-March.

While the pace of Credit Suisse client withdrawals has since slowed, it has not yet reversed, suggesting UBS has done its job as it prepares to absorb its struggling rival. Meanwhile, Credit Suisse still holds CHF108 billion worth of debt from the Swiss National Bank, even though it repaid CHF60 billion during the quarter.

In Monday’s announcement, Credit Suisse also said it had closed a $175 million deal to buy the boutique investment bank of Michael Klein, a longtime dealmaker and former board member. The takeover is part of a complex financial restructuring plan that involves merging Credit Suisse’s investment bank with Mr Klein’s and eventually spinning off the combined business.

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