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Credit Suisse has raised enormous amounts of capital over the past 9 years, in the era of its CEOs Brady Dougan and Tidjane Thiam. Now, Thomas Gottstein, who was appointed a year ago, began his first New Year as CEO with a claim for a clean table.
Hardly said, the funds of Australian financier Lex Greensill collapsed. As a result, the CS threatens the next quarter with red figures.
That happened to him in the fourth quarter of 2020, when CEO Gottstein addressed many inherited problems: a stake in an American hedge fund, open processes related to the 2008 financial crisis, altogether more than a billion cancellations.
The final result was 350 million less for the period from October to December of last year.
The first quarter of 2021 will end in a few days. And the question will be how much of the billions in Greensill Funds that are at risk has to be borne by the CS alone.
Depending on the provisions the bank has made for the big crisis, it may need fresh capital.
She doesn’t want to know anything about it. „Our forecast for the CET1 core capital ratio of at least 12.5% for at least the first half of 2021 remains unchanged, as does our forecast for our share buyback program, which we will continue to implement. “
Needing more capital, that happened to Tidjane Thiam after he cleaned up old positions at the investment bank. The CS needed 6 billion fresh money under its new boss.
Contrary to today’s statement, Thomas Gottstein and the Credit Suisse Board of Directors could conclude that the next infusion makes sense.
These are considerations that are circulating in financial circles; There is still no clear information in this direction.
The truth is that Finma has invaded CS. The Bern banking supervisory authority wants to know from those responsible how this debacle happened, who is responsible and how the bank can safely emerge from the crisis.
Above all, managers must quickly stop potential customer exits. As reported by SonntagsZeitung, several hundred wealthy private clients of the bank’s wealth management invested heavily in their Greensill funds.
CS had been promoting the funds in its global asset management until recently, mostly with Greensill advisers like former British Prime Minister David Cameron.
The point of sale was to put cash that was thrown, threatened by negative interest rates, into Greensill’s supposedly fail-safe supply chain vehicle.
The lure appeared, the fund’s assets soared. Greensill’s return on investments was a small percentage year-over-year, making it a proud product of interest.
Investors rubbed their hands over the beautiful income not wondering how this could be possible without taking great risks.
