Credit Suisse on Thursday reported a fourth-quarter and annual net loss that missed expectations, as the Swiss bank continued with its huge strategic overhaul.

The lender’s fourth-quarter net loss attributable to shareholders came in at 1.4 billion Swiss francs ($1.51 billion), worse than analyst projections of a loss 1.32 billion Swiss francs, according to Eikon.

It took the embattled Swiss lender’s full-year loss to 7.3 billion Swiss francs, worse than the 6.53 billion Swiss franc loss expectation by analysts.

Credit Suisse is telegraphing another “substantial” full-year loss in 2023 before returning to profitability in 2024.

CEO Ulrich Koerner told CNBC on Thursday that the full results were “completely unacceptable,” but underscored the need for the ongoing multi-year transformation program.

Under pressure from investors, the bank in October announced a plan to simplify and transform its business in an effort to return to stable profitability following chronic underperformance in its investment bank and a litany of risk and compliance failures.

Koerner in a statement accompanying results that 2022 was a “crucial year for Credit Suisse” and that it had been “executing at pace” on its strategic plan to create a “simpler, more focused bank.”

“We successfully raised CHF ~4 billion in equity capital, accelerated the delivery of our ambitious cost targets, and are making strong progress on the radical restructuring of our Investment Bank,” he said in the statement.

“We have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation by reshaping our portfolio, reallocating capital, right-sizing our cost base, and building on our leading franchises.”

In November, the bank projected a 1.5 billion Swiss franc loss for the fourth quarter amid large-scale restructuring costs, while Credit Suisse shareholders greenlit a $4.2 billion capital raise aimed at financing the overhaul.

The capital raise included the sale of 9.9% of Credit Suisse shares to the Saudi National Bank, making it the bank’s largest shareholder. The Qatar Investment Authority became the second-largest shareholder in Credit Suisse after doubling its stake late last year.

Reports of liquidity concerns led Credit Suisse to experience significant outflows of assets under management in late 2022, but Koerner told CNBC at the World Economic Forum in January that the bank had seen a sharp reduction in outflows, and that money was now coming back to some areas of the business.

Despite this, net outflows hit 110.5 billion Swiss francs in the fourth quarter, taking the annual asset outflows for 2022 to 123.2 billion Swiss francs, compared to 30.9 billion inflows for 2021.

The bank’s wealth management division alone saw net asset outflows of 95.7 billion in 2022, concentrated heavily in the fourth quarter.

Credit Suisse revealed that around two thirds of the broader net asset outflows in the quarter occurred in October, and “reduced substantially for the rest of the quarter.”

Koerner told CNBC that 60% of the total outflows came in October. Since then, the bank has embarked on an outreach program, speaking to 10,000 global wealth management clients and 50,000 clients in Switzerland.

“That has created tremendous momentum, and I expect that momentum traveling with us throughout 2023 but you can see it if you look into January,” Koerner told CNBC’s Geoff Cutmore.

“The group is net positive on deposits, wealth management globally net positive on deposits, Asia Pac net positive on deposits, Asia Pac positive on net new assets and also Switzerland positive on net new assets, so I think if you look at that situation which we experienced since January, I would say the situation has changed completely,” Koerner said.

He also expressed confidence that the outreach program and “tremendous” levels of client loyalty would help the bank retain and build on returning inflows.

In its report, the bank said its results were “significantly affected by the challenging macro and geopolitical environment with market uncertainty and client risk aversion.”

“This environment has had an adverse impact on client activity across all our divisions. While we would expect these market conditions to continue in the coming months, we have taken comprehensive measures to further increase our client engagement, regain deposits as well as AuM and improve cost efficiencies,” the bank said.

Other highlights from Thursday’s earnings:

• CET 1 (common equity tier one capital) ratio, a measure of bank solvency, reached 14.1% from 14.4% a year ago.
• Fourth-quarter net revenues stood at 3.06 billion Swiss francs, from 4.58 billion Swiss francs a year earlier.
• Total fourth-quarter operating expenses were 4.33 billion Swiss francs, versus 6.27 billion a year ago.

Credit Suisse’s restructuring plans include the sale of part of the bank’s securitized products group (SPG) to U.S. investment houses PIMCO and Apollo Global Management, as well as a downsizing of its struggling investment bank through a spin-off of the capital markets and advisory unit, which will be rebranded as CS First Boston.

Credit Suisse shares have gained almost 17% since the turn of the year.

The planned carve-out of the investment bank to form U.S.-headquartered CS First Boston moved ahead in the fourth quarter. Credit Suisse on Thursday announced that it had acquired The Klein Group for $175 million.

The bank also confirmed the appointment of Michael Klein as CEO of banking and the Americas, as well as CEO designate of CS First Boston.