The impact of the massive outflows that the bank reported this week and the fact that rivals in the key growth market of Asia are benefitting from the Swiss firm's troubles, prompted by the fall of the bank's credit Suisse Group AG to a new record low.
On Friday, shares of the lender fell by as much as 5% in Zurich after Vontobel cut its price target and said the firm needed to halt outflows in its core wealth management business. The stock has declined for the longest losing streak since 2014, and it has declined for nine days in a row.
Credit Suisse said that clients had pulled 84 billion francs $89 billion in the first six weeks of the fourth quarter, with no reversal in sight. The wealth management unit, where they had amounted to 10% of assets under management, had particularly a lot of outflows.
UBS Group AG and Morgan Stanley are among the beneficiaries of the client exodus, Bloomberg reported on Thursday, with both firms seeing significant new business in Asia, a major growth market for wealth management. According to a 2021 ranking by Asian Private Banker, UBS is the largest private bank in Asia by assets, excluding onshore China, while Credit Suisse is second-biggest.
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Andreas Venditti, an analyst at Vontobel, said he was stunned by the outflows and predicted that Credit Suisse will post another loss next year due to elevated funding costs. He reduced his price target for the shares to 3.5 francs from 4 francs.
The shares fell by 4.5% to 3.39 francs by 3: 04 p.m. in Zurich.
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