Credit Suisse has asked investors for about $ 2bn as they seek to rebuild their finances after suffering what the chief executive called “unacceptable” losses.
The Swiss banking giant, one of the most respected names in the industry, has been rocked by two collapses.
Greensill And Archegos Affect
On Thursday, Swiss authorities announced that they were stepping up their probes in to Credit Suisse operations.
These relate to dealings with two firms, Archegos and Greensill.
Credit Suisse suffered billions of dollars in losses after the collapse of Archegos, a US hedge fund fund.
The bank also is amongst the creditors to failed financial company Greensill, which made headlines for its role in financing the UK Liberty Steel and lobbying by former Prime Minister David Cameron.
Unacceptable Losses
On Thursday, Credit Suisse reported a loss of 757m Swiss francs ($ 827m; £ 594m) in the first three months of the year, having previously warned that losses could reach the SFr900m.
It would have been the best trading quarter in the bank for a decade, but Credit Suisse was forced to write off SFr4.4bn related to the Archegos collapse.
“The losses we are reporting this quarter, as a result of this [Archegos] case, are unacceptable,” the bank’s chief executive Thomas Gottstein said in a statement.
As part of measures to strengthen its finances, Credit Suisse has said it will raise SFr 1.7bn ($ 1.9bn; £ 1.5bn) from investors. The news sent Credit Suisse shares less than 5% on initial trading. Shares have fallen 30% since the start of March.
Swiss finance minister Finma was already monitoring Credit Suisse’s relationship with Greensill, and on Thursday announced that it would now consider its involvement with Archegos.
Greensill Liquidation
In London on Thursday, administrators overseeing Greensill’s activities said that its Australian parent company had entered liquidation.
Mr Gottstein has been grappling with limiting the damage to Credit Suisse’s reputation and retaining both clients and staff.
Mr Gottstein has been striving to curb Credit Suisse’s reputation and to protect customers and employees.
It is expected that in this effort he will be assisted by former Lloyds Banking Group chief executive Antonio Horta-Osorio, who is reportedly the next chairman of Credit Suisse.
But analysts have said the crisis at Credit Suisse will cast a long shadow over the bank. “The full consequences from the reputational loss will only be visible over time,” said Andreas Venditti, an analyst at Vontobel bank,
