by Investec Switzerland. Last October, Credit Suisse Group AG Chief Executive Officer Tidjane Thiam called two of his bank’s businesses the “ugly ducklings that no one likes.” He’s just been reminded why. © Simon Zenger | Dreamstime.com The Zurich-based lender’s units that trade corporate bonds and securitized products contributed about 0 million in so- called mark-to-market losses in the fourth quarter of 2015, according to the bank’s presentation to investors. That includes a 9 million loss on distressed debt and 7 million tied to leveraged-finance underwriting. The losses, triggered by a slump in the value of inventory that Credit Suisse holds on its own balance sheet amid upheaval in global markets, show the risks that come with acting as a broker in high-yield assets. The markdowns contributed to the biggest fixed-income trading revenue decline among global investment banks and a quarterly loss for the bank that sped up Thiam’s plans to overhaul the lender and meet new, tougher capital rules. “The price of oil went down, people panicked, prices started moving very fast,” Thiam told reporters on Thursday.“It’s never pleasant to have losses but they are manageable,” he said, adding that the bank will probably book gains when market values rebound.
Topics:
Investec considers the following as important: Business & Economy, Credit Suisse ugly ducklings, Credit Swiss loss, Editor's Choice, Tidjane Thiam
This could be interesting, too:
Investec writes Federal parliament approves abolition of imputed rent
Investec writes Abolition of imputed rent gets bogged down in complexity
Investec writes Swiss parliament accepts contentious budget
Investec writes Tourism one quarter of Switzerland’s traffic
Last October, Credit Suisse Group AG Chief Executive Officer Tidjane Thiam called two of his bank’s businesses the “ugly ducklings that no one likes.” He’s just been reminded why.
© Simon Zenger | Dreamstime.com
The Zurich-based lender’s units that trade corporate bonds and securitized products contributed about $500 million in so- called mark-to-market losses in the fourth quarter of 2015, according to the bank’s presentation to investors. That includes a $209 million loss on distressed debt and $107 million tied to leveraged-finance underwriting.
The losses, triggered by a slump in the value of inventory that Credit Suisse holds on its own balance sheet amid upheaval in global markets, show the risks that come with acting as a broker in high-yield assets. The markdowns contributed to the biggest fixed-income trading revenue decline among global investment banks and a quarterly loss for the bank that sped up Thiam’s plans to overhaul the lender and meet new, tougher capital rules.
“The price of oil went down, people panicked, prices started moving very fast,” Thiam told reporters on Thursday.
“It’s never pleasant to have losses but they are manageable,” he said, adding that the bank will probably book gains when market values rebound.
By Donal Griffin, Bloomberg