Credit Suisse has reported a $275 million loss in its Q1 financials for 2021. This figure is a considerable drop compared to what it had recorded in the same financial period in 2021. The loss is attributed to the scandal in its U.S based hedge fund.
Credit Suisse, a financial services firm based in Switzerland, has reported a net loss of $275 million in the first quarter of 2021. The firm is attributing the losses to the scandal linked to their U.S based hedge fund. The firm had also earlier released a report showing they were expecting losses after a decline in their revenues after the scandal.
However, the bank has also reported massive growth in its other services, including wealth management and investment banking. Credit Suisse reported an 80% growth in its investment banking sector than the first quarter of 2021.
Losses attributed to U.S. based hedge fund
Credit Suisse has attributed its losses to the scandal in their U.S based hedge fund. The bank was required to pay CHF 4.4 Billion in terms of fines following the scandal, which negatively affected their finances.
The CEO of the bank, Thomas Gottstein, further added that the losses were not acceptable. They were also looking into measures to address the current situation and solve issues that created the scandal.
Investment banking is on the rise
Credit Suisse also revealed that despite the losses, their investment banking division was growing. This growth resulted from improved performance in Equity sales and Trading and Fixed Income Sales and Trading. Besides, the bank also reported an increase in revenues related to capital markets and advisory.
Credit Suisse’s wealth management division also saw an increased growth following the CHF 3.9 billion reported in the first quarter of 2021. The revenues are a 3% growth compared to CHF 3.76 reported in the first quarter of 2021.
The growth of these two divisions comes when investments in capital markets and digital assets are increasing. This growth trend has been reported across the entire financial services sector.
The CEO of Credit Suisse assured their clients and stakeholders that they were working towards addressing underlying issues and recovering the losses. He added that the bank would emerge more robust and that their financial performance in specific divisions was applauded. He further states that the well-performing divisions will make the company’s balance sheet more robust and offer support to other divisions and other core functions.