Credit Suisse, a Switzerland-based financial services firm, today released its financial results for the first quarter of 2021. The bank reported a CHF 252 million ($275 million) net loss during Q1 of 2021, which is a significant drop compared to the same period in 2020.
According to the official announcement, Credit Suisse suffered major losses due to the recent US-based hedge fund scandal. Earlier this month, Credit Suisse released an update about the expected losses from the meltdown of a US-based hedge fund.
Despite the overall loss, the bank reported a significant growth in its wealth management and investment banking businesses. Credit Suisse saw CHF 3.9 billion revenue in its investment banking division, which is up 80% compared to Q1 of 2020.
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Commenting on the latest announcement, Thomas Gottstein, Chief Executive Officer of Credit Suisse Group AG, said: “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.”
Growth in Investment Banking
Credit Suisse added that the growth in its investment banking businesses was driven by strong performance in Fixed Income Sales and Trading along with Equity Sales and Trading. Additionally, the bank reported a significant jump in revenues from Capital Markets and Advisory. The wealth management division of Credit Suisse saw revenues of CHF 3.9 billion in Q1 of 2021, which is up 3% compared to CHF 3.76 billion in Q1 of 2020.
“We will work to ensure Credit Suisse emerges stronger. However, it is also important to recognize that our underlying Q1 2021 financial performance, across all divisions, was strong, supported by solid results in Switzerland, and strong growth in APAC and investment banking. We expect that our successful MCN placement today will further strengthen our balance sheet and enable us to support the momentum in our core franchises,” Gottstein added.