A Credit Suisse logo in the window of a Credit Suisse Group AG bank branch in Zurich, Switzerland.
Bloomberg | Bloomberg | Getty Images
LONDON — Credit Suisse reported Thursday a net loss of 252 million Swiss francs ($275 million) at a time of increased pressure on the bank.
It said the loss reflected a “significant charge with respect to the US-based hedge fund matter in 1Q21 (first quarter), offsetting positive performance across wealth management and investment banking.”
It comes after the Swiss lender warned of heavy losses earlier this month after a scandal involving Archegos Capital, a U.S. based hedge fund, which collapsed after taking on too much risk. Credit Suisse said it took a hit of 4.4 billion Swiss francs as a result.
In addition, investment bank CEO Brian Chin and chief risk and compliance officer, Lara Warner, both stepped down. The executive board decided to waive bonuses for the 2020 year, and also cut the proposed dividend.
The scandal has had a significant effect on the bank’s earnings. Credit Suisse said Thursday that adjusted net revenue would have hit 7.4 billion Swiss francs excluding significant items if it hadn’t been for the Archegos situation. This would have represented a 35% increase from a year ago.
“Our results for the first quarter of 2021 have been significantly impacted by a CHF (Swiss franc) 4.4 billion charge related to a US-based hedge fund. The loss we report this quarter, because of this matter, is unacceptable,” Thomas Gottstein, chief executive of Credit Suisse, said in a statement alongside Thursday’s results.
In March, Credit Suisse also adjusted its asset management business and suspended bonuses after the collapse of Greensill Capital, a British supply chain finance firm.
Credit Suisse said Thursday it had exited 97% of its trading positions relating to the Archegos hedge fund scandal and expects to take an additional loss in the second quarter of around 600 million Swiss francs.
This is a developing news story and will be updated shortly.
