Credit Suisse Traders Still Carry the Bank
The Swiss bank is relying on its trading arm to offset coronavirus-related loan provisions. But that’s a risky position in which to find yourself.
Baptism of fire.
Photo: Bloomberg
For a bank that has tried so hard to shed its “Wall Street” image back home, Switzerland’s Credit Suisse Group AG is still hugely reliant on its trading arm. Its first set of earnings since the Covid-19 lockdown is a reminder of just how volatile the securities and lending business can be.
Chief Executive Officer Thomas Gottstein, in the job for just two months, has had a baptism of fire, he told Bloomberg Television on Thursday. As entire continents shut their economies in the first quarter of 2020 and markets gyrated wildly, the Swiss giant suffered its biggest hit from loan provisions and markdowns in more than a decade. They totaled more than $1 billion. Trading revenue was higher as institutional and wealthy clients bought and sold more securities, helping to cushion the blow, but Gottstein can’t count on that being repeated.