A Credit Suisse logo in the window of a Credit Suisse Group AG bank branch in Zurich, Switzerland.
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LONDON – Credit Suisse reported a net loss of 252 million Swiss francs ($ 275 million) on Thursday in a period of heightened pressure on the bank.
He said the loss reflected a “significant tax on US-based hedge funds in the first quarter (first quarter), offsetting positive performance in asset management and investment banking”.
It comes after the Swiss creditor warned of heavy losses earlier this month following a scandal involving Archegos Capital, a US hedge fund, which collapsed after taking too much risk. Credit Suisse said it had achieved a success of 4.4 billion Swiss francs as a result.
In addition, investment bank CEO Brian Chin and chief risk and compliance officer Lara Warner have resigned. The Executive Committee has decided to drop the bonuses for 2020 and also reduce the proposed dividend.
The scandal had a significant effect on the bank’s earnings. Credit Suisse said on Thursday that adjusted net income would have reached 7.4 billion Swiss francs, excluding significant items if it were not for the Archegos situation. This would have been a 35% increase over a year ago.
“Our results for the first quarter of 2021 were significantly affected by a fee of CHF 4.4 billion (Swiss franc) related to a hedge fund based in the US. The loss we report this quarter from this cause, it is unacceptable, “Thomas Gottstein said, the CEO of Credit Suisse in a statement alongside Thursday’s results.
In March, Credit Suisse adjusted its asset management business and suspended bonuses following the collapse of Greensill Capital, a British supply chain finance firm.
More losses ahead
Credit Suisse said on Thursday that it had left 97% of its trading positions linked to the Archegos hedge fund scandal and expects to receive an additional loss in the second quarter of around 600 million Swiss francs.
This is a developing news item and will be updated soon.