Credit Suisse hit by hedge funds warns of ‘significant’ losses

LONDON – Credit Suisse on Monday warned of a “very significant” blow to its first quarter results, after starting to exit positions with a major US hedge fund that defaulted on margin calls last week.

In a business update ahead of the market opening, the Zurich-based lender said a number of other banks have also been affected and have started vacating their positions with the limited company.

“While it is currently premature to quantify the exact magnitude of the loss resulting from this exit, it could be very significant and important to our first quarter results, despite the positive trends announced in our stock market release earlier this month.” , Credit Suisse told me.

The bank added that it would provide a further update on the matter “in due course”.

The latest developments come in the midst of a tumultuous 18 months for Credit Suisse. Earlier this month, the bank announced a reshuffle of its asset management business and a suspension of bonuses as it sought to contain the damage caused by the collapse of the UK’s chain finance company. Greensill Capital supply.

Credit Suisse’s asset management unit held $ 10 billion of the company’s funds and noted that some investors had threatened legal action.

Meanwhile, in February 2020, former CEO Tidjane Thiam resigned following a spy scandal that engulfed the bank in 2019. Thiam claimed he had no knowledge of the oversight of two former colleagues, including the boss of wealth management, Iqbal Khan, who has left the company.

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