Credit Suisse recorded a loss in the first quarter of 2021 due to the financial problems of the US hedge fund Archegos. This was reported by the Swiss bank on Tuesday morning.
In the last quarter, the loss was expected to be 900 million Swiss francs before tax, or about 813 million euros. This was largely due to a loss of no less than 4.4 billion francs due to financial problems at an American hedge fund.
Archegos did not comply with so-called ‘margin calls’, or calls from the Swiss bank and other banks last week to replenish the collateral, after it had become insufficient to properly hedge the risks.
The Swiss bank and a number of other banks decided to reduce their positions in this hedge fund and take a loss. The bank said it had launched an investigation on Tuesday morning into the Archegos case to “investigate the wider consequences and to learn lessons from it”.
In addition to this loss, the bank stated that it had “very strong performance”, especially in the investment bank and asset management.
Credit Suisse expects the CET1 ratio to be at least 12 percent at the end of the first quarter. After the completion of the share buy-back programme in the first quarter of this year, the bank has decided to take the shares to buy, until the capital ratios will continue to increase and there, again, the dividend will be paid.
At the end of the first quarter, Credit Suisse stated that its liquidity position was strong.
Credit Suisse has decided to remove board discharge from the agenda for the next Annual Meeting. The debacle with Archegos also affects the rewards and Lara Warner and Brian Chin resign as risk Director and CEO of the investment bank, respectively.
Christian Meissner succeeds Chin and Joachim Oechslin temporarily becomes the risk Director of the bank.
Credit Suisse reports the figures for the first quarter on 22 April.