Credit Suisse reported a total of 61.2 billion Swiss francs (CHF) ($69 billion) in outflows in the first quarter of 2023, with a net asset outflow of CHF 47.1 billion ($52 billion) in its wealth management division. The bank also registered a CHF 1.32 billion ($1.48 billion) impairment charge in its wealth management unit in the quarter. However, Credit Suisse reported a net income of CHF 12.43 billion ($13.97 billion) in the first quarter, compared to a net loss of CHF 273 million ($307 million) in the same period in the previous year.

The bank expects to report substantial pre-tax losses in the second quarter of 2023 and 2024. Factors weighing on the bank’s results for the next quarter and year include litigation, regulatory action, credit spreads and related funding costs, and non-core jobs.

In March 2023, Credit Suisse was absorbed by rival UBS for CHF 3.2 billion ($3.6 billion) as the Swiss regulators stepped in to ring-fence the bank amid a crisis of confidence in banking following the collapse of several lenders in the US. Under the terms of the merger agreement, all shareholders of Credit Suisse received one share in UBS for 22.48 shares in Credit Suisse.

In light of the merger with UBS, Credit Suisse and Michael Klein jointly agreed to terminate Credit Suisse’s $175 million acquisition of Michael Klein’s investment banking business, The Klein Group.

The Swiss Federal Council on April 5 instructed the Swiss Federal Ministry of Finance to cancel or reduce unpaid variable remuneration for Credit Suisse’s top three executives. The bank had net borrowings of CHF 108 billion ($121 billion) provided by Switzerland’s central bank as of March 31, 2023, after repayments of CHF 60 billion ($67 billion) in the quarter, with further repayments of CHF 10 billion ($11 billion) as of April 24, 2023.

Credit Suisse’s key units continued to lose money and shed clients in the first quarter, forcing the bank to borrow far more from a central bank liquidity backstop than previously known. Six months before the merger with UBS, Credit Suisse lost more than CHF 200 billion ($225 billion) of customer deposits. Credit Suisse would have posted a loss without a gain tied to the regulatory decision to wipe out many of its bondholders in the deal.

The quarterly profit was boosted by the write-down of CHF 15 billion ($17 billion) of additional tier 1 capital notes as part of UBS’s acquisition of Credit Suisse, which proved hugely contentious.