Credit Suisse posted a net loss for the first quarter, attributing the hit to issues related to a U.S.-based hedge fund.
The Swiss bank posted a net loss of 252 million Swiss francs ($275 million) in the first quarter of 2021, according to its latest results, compared to 1.31 billion Swiss francs of profit in the same period last year.
The results reflected a «significant charge with respect to the U.S.-based hedge fund matter […] offsetting positive performance across wealth management and investment banking».
Revenue Growth
The strong performance was most notable within its investment bank which posted revenue growth of 80 percent year-on-year. Its wealth management business saw a 3 percent boost in net revenue as well as net new assets of 14.4 billion Swiss francs.
Overall, Credit Suisse registered over 7.57 billion Swiss francs in net revenue, a 31 percent increase from 5.78 billion Swiss francs in the first quarter of 2020.
Archegos Loss: «Unacceptable»
Credit Suisse’s group chief executive Thomas Gottstein expressed disappointment about the loss in the statement, highlighting steps taken to address the issue without naming Archegos.
«The loss we report this quarter, because of this matter, is unacceptable. Together with the Board of Directors, we have taken significant steps to address this situation as well as the supply chain finance funds matter,» he said, also alluding to the Greensill fund failure.
«Among other decisive actions, we have made changes in our senior business and control functions; we have enhanced our risk review across the bank; we have launched independent investigations into these matters by external advisors, supervised by a special committee of the Board; and we have taken several capital-related actions.»
Share Issuance
Credit Suisse is also issuing new shares in a move to strengthen its capital position.
The bank issued mandatory convertible notes that will switch into 203 million shares in two batches – one has already been allotted – aimed at existing shareholders, ultra-high net worth individuals and other institutional investors.
