The Magic of Credit Suisse's Writedown
This is indeed a magic: "While Credit Suisse posted a record $13.9 billion profit in its final quarter — it was only due to a writedown that wiped out many bondholders." Yes, you took down investors and magically you have black on the paper. Swiss Credit Suisse has destroyed many investors. Simply, Switzerland has lost the aura when it comes to holding assets for global clients.
Credit Suisse’s first-quarter results, revealed Monday, are providing a glimpse into just how dire the situation wasfor the bank before the Swiss government's brokered takeover by rival UBS. There were $69 billion in outflows as clients frantically pulled their money out of the bank after a key Saudi shareholder said it wouldn’t invest any more into it. Over a six-month period, Credit Suisse lost more than $225 billion of customer deposits. While Credit Suisse posted a record $13.9 billion profit in its final quarter — it was only due to a writedown that wiped out many bondholders.
Credit Suisse’s book value at the end of March was about $60.7 billion, well above the roughly $3 billion UBS is paying.
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