ZURICH – Swiss banking giant Credit Suisse, rocked by the bankruptcies of British financial firm Greensill and United States hedge fund Archegos Capital Management, suffered a first-quarter (Q1) net loss of 252 million Swiss francs (RM1.13 billion), it reported today.
The bank, which saw a net profit of 1.3 billion francs a year earlier, reported a charge of 4.4 billion francs to cover the damage related to Archegos.
It said it expects additional losses of 600 million francs on this fund in Q2.
Switzerland’s second-largest lender was heavily invested in Greensill, a firm specialising in short-term corporate loans via a complex and opaque business model, and was forced to suspend four funds after the company declared insolvency last month.
Meanwhile, a sudden share sell-off by Archegos triggered upset on financial markets that hit Credit Suisse particularly hard.
The Wall Street Journal reported yesterday that Credit Suisse racked up more than US$20 billion (RM82.18 billion) in exposure to Archegos-related investments, and the bank’s executives were told only days before the hedge fund’s implosion.
“Our results for Q1 2021 have been significantly impacted by a charge of 4.4 billion Swiss francs related to a US-based hedge fund,” said CEO Thomas Gottstein in today’s statement.
“The loss we report this quarter, because of this matter, is unacceptable.”
But, he said, “we have taken significant steps to address this situation, as well as the supply-chain finance funds matter.” – AFP, April 22, 2021
