Saxo Bank Says Losses on Swiss Franc May Reach $107 Million
(Bloomberg) — Saxo Bank A/S, the Danish currency trader hit by Switzerland’s decision to abandon its peg, said it may lose as much as 700 million kroner ($107 million) after clients made bad bets on the franc.
Saxo would still meet its capital requirements in the “unlikely” event losses climb that high, the Copenhagen-based bank said in a statement.
Saxo told clients earlier this week they’ll have to pay twice as much to trade currencies as volatility surged after Switzerland unexpectedly dropped its three-year-old peg. The bank will review margins more frequently and all asset classes are under scrutiny, said Claus Nielsen, its head of markets.
Saxo Bank will have total capital of 1.97 billion kroner and the whole group’s capital will be 2.15 billion kroner if it can’t recover the client losses, Saxo said.
The bank will be in discussions with clients over the next weeks.
To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzko1@bloomberg.net To contact the editors responsible for this story: Tasneem Hanfi Brogger at tbrogger@bloomberg.net Jonas Bergman
