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- Credit Suisse lost 757m Swiss francs in Q1
- Bank will boost capital reserves
- Swiss regulator starts enforcement proceedings
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“Our results for the first quarter of 2021 have been significantly impacted by a CHF 4.4 bn charge related to a US-based hedge fund. The loss we report this quarter, because of this matter, is unacceptable.
Together with the Board of Directors, we have taken significant steps to address this situation as well as the supply chain finance funds matter.
Among other decisive actions, we have made changes in our senior business and control functions; we have enhanced our risk review across the bank; we have launched independent investigations into these matters by external advisors, supervised by a special committee of the Board; and we have taken several capital-related actions.
Related: Credit Suisse executives depart after Archegos and Greensill losses
Alongside announcing its earnings, the bank said it will issue mandatory convertible notes (MCN) convertible into 203 million shares, which should net the bank more than 1.8 billion Swiss francs. That would boost its core capital level to around 13% from 12.2%.
Thomas Gottstein, CEO, comments on the first quarter 2021 financial results. More details are available here: https://t.co/40CU4bUl6Q pic.twitter.com/Ixd3P2f4js
“We believe that lockdowns increase the probability of prolonged dovish ECB policy. Restrictions put pressure on European economic activity, especially in the services sector, limiting the aggregate demand.
As long as economic activity remains subdued, the ECB will probably keep the key rate at historical lows and will continue to purchase bonds as they try to preserve favorable financing conditions. The ECB has already increased the pace of bond purchases at one of the latest meetings, so changes to the current monetary policy look very unlikely at the upcoming meeting. The economy will likely gather pace in the second half of 2021 amid a better epidemic situation, massive vaccination, and global economic recovery.
Related: Coronavirus live news: India hits global record of 314,835 new cases; US passes 200m vaccines
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