Credit Suisse warns of ‘highly significant’ loss linked to hedge fund
The Swiss bank Credit Suisse says it may face a “highly significant” loss in the first quarter due to an unnamed American hedge fund client defaulting on margin calls.
In a statementExternal link issued on Monday, the bank said: “While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results”.
A margin call is a request from a broker to add more money to an account to cover potential losses. Following the failure of the hedge fund to meet these margin commitments, Credit Suisse and a number of other banks are in the process of exiting these positions, the Swiss bank said.
Credit Suisse said it would provide an update on the matter in “due course”.
Its share price ended the day down 13.8% on the Swiss stock exchange.
Latest blow
Earlier, Japanese lender Nomura Holdings Inc. also warned of a “significant” potential loss from an unnamed US client.
According to various international media, the US hedge fund is Archegos Capital Management, which was founded by Bill Hwang.
The Swiss financial regulator, Finma, said on Monday that Credit Suisse had made it aware of its involvement in an “international hedge fund case” involving “several banks and locations internationally”.
The potential loss is the latest blow to Credit Suisse, which was hit by the recent Greensill scandal. The Swiss bank this month closed around $10 billion of supply-chain finance funds that bought notes from Greensill.
More
More
Credit Suisse and Nomura warn of losses after Archegos-linked sell-off
This content was published on
Credit Suisse finds itself embroiled in a second collapsed financial scheme in the space of weeks.
Young undocumented migrants gain easier access to vocational training
This content was published on
Rejected asylum-seekers and young undocumented migrants in Switzerland will have easier access to basic vocational training from June 1.
Migration: Swiss government wants to shorten reunification period for families
This content was published on
Family members of people temporarily admitted to Switzerland should in future be able to join them after two years instead of three.
This content was published on
2023 was a record year for the Rhaetian Railway in several respects. Never before has the narrow-gauge railway in Graubünden, eastern Switzerland, transported so many passengers and cars.
Swiss CFOs much more optimistic despite global uncertainty
This content was published on
The main concerns of business leaders in Switzerland are geopolitical uncertainty and the important trading partners Germany and China.
Record organ donation in Switzerland despite high rejection rates
This content was published on
More organ donations were recorded in Switzerland in 2023 than ever before. This was despite a high rejection rate of 58% by surviving relatives.
This content was published on
Seven years after the death of record-breaking Swiss mountain climber Ueli Steck, his estate is going to the Alpine Museum of Switzerland in Bern.
Junior Credit Suisse bankers to get $20,000 ‘lifestyle’ bonus
This content was published on
Credit Suisse says it will give more junior members of its capital markets and deal businesses a $20,000 “lifestyle” allowance.
This content was published on
Credit Suisse and GAM Investment Management are two Swiss actors caught up in the collapse of financial services group Greensill Capital.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.