Credit Suisse: A year of living chaotically
Credit Suisse’s hopes for 2021 were dashed by March, thanks to Greensill’s collapse and Archegos’s implosion. It really needs 2022 to go well.
After the turmoil of 2020, 2021 was supposed to be a year of super-sized numbers, as banks benefited from a global economic bounce. For most, it was. For Credit Suisse, it was assuredly not.
First came the collapse of Greensill Capital. Credit Suisse ran $10 billion worth of funds that invested in notes issued by the supply-chain finance specialist, which filed for insolvency in March.
Then came the shocking implosion of Archegos Capital Management. The meltdown of a hedge fund that lived and died on its love of heavily leveraged stock bets, cost UBS $861 million, Morgan Stanley $911 million, and Nomura $2.9 billion.
But in absorbing a $5.5 billion hit, Credit Suisse was by far the most exposed: Archegos hit both its brand and balance sheet.
Instead of posting its best trading quarter for a decade, it recorded a SFr252 million ($269 million) loss in the first three months of the year, against net income of SFr1.31