Credit Suisse warns over hit from Greensill collapse
Credit Suisse has warned that it could face a charge stemming from the collapse of supply chain finance firm Greensill Capital.
The Swiss bank has been racing to assess the scale of its exposure to Greensill, a SoftBank-backed company that claimed to be making finance fairer but that collapsed into administration this month after its insurers refused to renew cover.
Its founder, Lex Greensill, was a client of Credit Suisse’s private bank, while the company also had relationships with its investment bank and asset management arms.
In a trading update on Tuesday, Credit Suisse said that $50m of a $140m bridge loan it made to Greensill last year had been repaid.
However it warned that “while these issues are still at an early stage, we would note that it is possible that Credit Suisse will incur a charge in respect of these matters.”
The bank added that its priority was to recover money that clients had put into supply chain finance funds, which it marketed and offered exposure to loans made by Greensill. These funds, which had a net asset value of $10bn, were suspended in late February.
“Initial redemption repayments totalling $3.1bn across the four funds have been made beginning on March 8 2021,” the bank said in the statement.
Alongside the disclosure on Greensill, Credit Suisse said that it had made the highest pre-tax profits in a decade in January and February.
“Our investment bank division is benefiting from a particularly strong performance in capital markets issuance activity and from a continued good performance across sales and trading,” the bank said.