Credit Suisse has forecast a pre-tax loss of up to SFr1.5bn ($1.6bn) in the fourth quarter of its financial year, citing a “substantial” industry-wide slowdown.

The Swiss bank, which is undergoing a restructuring to recover from a string of scandals, said in an updated outlook on Wednesday that its wealth management division was likely to post a loss after net interest income took a hit from lower deposits and fees. It also expects the investment bank to make a significant pre-tax loss.

Net outflows were about 6 per cent of assets under management across the group at the end of the third quarter, Credit Suisse said.

In its wealth management division, those outflows were about 10 per cent of assets under management at the end of the third quarter, it added.

The bank also confirmed its capital ratio guidance issued last month, targeting a common equity tier one ratio — a reflection of financial resilience — of more than 13.5 per cent by 2025 and of at least 13 per cent from 2023 to 2025.

Last month, the bank announced a radical restructuring plan, including carving up and spinning off its investment bank, cutting thousands of jobs and raising $4bn in capital, to help it move on from scandals and a SFr4bn third-quarter loss.

“Credit Suisse began experiencing deposit and net asset outflows in the first two weeks of October 2022 at levels that substantially exceeded the rates incurred in the third quarter of 2022,” the bank said in a statement.

It expected to record a SFr75mn loss on the disposal of its stake in Allfunds Group, the bank added.