What happened

For the week, shares of the Swiss bank Credit Suisse (CS) had dropped more than 15% as of market close Thursday after the bank reported its earnings results for the fourth quarter of 2022, which investors were not pleased with.

So what

In the fourth quarter, Credit Suisse reported a loss of $0.50 per share on total revenue of $3.3 billion. For the full year of 2022, the bank reported a loss of about $7.9 billion, the bank's worst showing since the Great Recession. As of market close Thursday, shares of the embattled bank traded just over $3 and below a $12 billion market cap.

Credit Suisse has gotten into big trouble in recent years after it took heavy losses due to exposure to funds such as Archegos Capital and Greensill Capital, both of which shockingly collapsed in 2021. Since then, management has vowed to overhaul its investment bank, which clearly had risk management issues.

In October of last year, Credit Suisse announced a plan to separate its investment bank into three subsidiaries: one unit for legacy business the bank wants to exit, one unit for the bank's markets business, and one unit for its capital markets and advisory business. Credit Suisse's overhaul also called for raising capital, some of which came from the Saudi National Bank, and cutting expenses.

The bank wants to focus on wealth management going forward, but in the fourth quarter, Credit Suisse saw assets under management (AUM) outflows of about $120 billion. However, Credit Suisse CEO Ulrich Körner told investors that AUM flows have been positive since the beginning of the year. Körner also told analysts to prepare for a full-year loss at the bank in 2023 as it deals with charges related to the restructuring and winding down of certain businesses.

Now what

Credit Suisse stock is currently trading at a big discount, and bank turnaround stories can be great investing strategies. But I'd recommend staying on the sidelines right now until there is further stabilization. It would also be good to get a better sense of what Credit Suisse will look like once it's done with its business exits and restructuring.