Credit Suisse, now part of UBS Group, has announced that it is anticipating losses in the current quarter due to its decision to exit certain loan portfolios and wind down certain management arrangements. In its latest financial report, the Swiss bank revealed that exiting some loan portfolios held in the non-core and legacy business division, which was established by UBS to house Credit Suisse’s positions and businesses that did not align with its strategy and policies, could result in a loss of around $1.6 billion in the third quarter.
Last month, UBS stated that the division would include assets and liabilities from the Capital Release Unit, as well as some assets and liabilities from the Investment Bank, Wealth Management, and Asset Management divisions. Additionally, Credit Suisse disclosed that a decision to wind down specific management arrangements could lead to an additional loss of up to $600 million in the same quarter.
Credit Suisse officially became a part of UBS in June, following several years of financial setbacks and damage to its reputation, which had resulted in significant customer outflows prior to the takeover. Notably, UBS reported a record net profit of $28.88 billion in the last quarter, with these results incorporating Credit Suisse as of June 1.