According to china securities journal, recently, DavidTaylor, a business reporter of Australian Broadcasting Corporation (ABC), said according to reliable sources that a large investment bank was on the verge of bankruptcy. Some overseas media speculated that one of them might be Credit Suisse. In response, the head of Credit Suisse responded that he refused to comment on the news. According to the latest report in the Financial Times, the senior management of Credit Suisse assured their major customers, counterparties and investors of their liquidity and capital status last weekend.
Credit Suisse has been plagued by a series of scandals in recent years, including the Archegos explosion, the bankruptcy of Greensill and the leak, which have damaged the company's reputation and dragged down its performance. Its share price has been in a downturn since February last year, falling from $65,438+04.90 to $3.92 at Friday's close.
According to S&P global market intelligence, Credit Suisse's five-year credit default swap index (CDS) soared by more than 250 basis points last Friday, the highest level in at least 10 years. Derivatives traders are frantically hedging the risk of bank default.
Credit Suisse, a century-old banking giant, is going bankrupt?
According to data from Bloomberg, Credit Default Swap Index of Credit Suisse climbed to 250 basis points on Friday, which was close to the level when Lehman Brothers collapsed in 2008, causing market concern. The higher the CDS default swap price, the greater the default probability.
Korner, CEO of Credit Suisse, acknowledged that there were many uncertainties and speculations inside and outside the bank in the second memo sent to employees in a few weeks, but called on employees not to confuse the daily stock price performance with the company's "strong capital base and liquidity". But this sentence, Lehman Brothers said something similar before its bankruptcy that year.
Korner pointed out that the details of the transformation plan could not be shared before June 27th, 10, but said that he would send the latest news to employees regularly until the strategic evaluation results came out, and asked employees to maintain discipline and keep close contact with customers.
Earlier, some media reported that Credit Suisse has drawn up a plan to split its investment banking business into three parts, namely consulting business, which may be divested at some time in the future; Bad bank, holding high-risk assets that will be gradually liquidated; There are other businesses. Credit Suisse hopes to become a "light capital" investment bank focusing on wealth management and banking.
According to the proposal submitted to the bank's board of directors, Credit Suisse hopes to sell the profit-making departments such as securitization products business, hoping to avoid losing its financing ability. Securitization products package debts such as mortgages and then sell them as securities, which will reduce banks' capital liabilities, but it will also make them lose one of the most profitable businesses.
What happened to Credit Suisse?
In 20021year, Credit Suisse suffered a "double whammy" from the ArchegosCapital explosion and the bankruptcy of GreensillCapital, which caused the company to suffer billions of dollars in losses and forced its investment banking director and chief risk officer to leave. In addition, Credit Suisse was convicted in the lawsuit of helping drug dealers to launder money, becoming the first large bank in Swiss history to be convicted in a criminal case.
Last year, Archegos' highly leveraged bets on several stocks collapsed, which shocked Wall Street and triggered a regulatory investigation. Credit Suisse took most of the losses. These losses caused Credit Suisse to experience the worst year since the financial crisis, prompting the management to make major adjustments and reorganize the board of directors.
According to the fund, due to "failure to adopt and implement basic modern risk management structures and processes, Credit Suisse suffered a loss of $5.5 billion just because of the Archegos case, not to mention extensive damage to its reputation and goodwill". Even a few days before Archegos was forced to close its position, the executives of Credit Suisse learned about the exposure of Credit Suisse to the fund.
Before Archegos' explosion, Credit Suisse has doubled the pressure of the collapse of supply chain finance company Greensill. After greenhill declared bankruptcy in March, 20021year, it closed its supply chain financial fund of 100 billion dollars holding greenhill bonds and reorganized its asset management department. Credit Suisse previously stated that by the end of 20021,five insurance claims had been submitted to greenhill, and the corresponding risk exposure of Credit Suisse's asset management was about $654.38+02 billion.
According to the data, Credit Suisse Group was established in 1856 and its headquarters is in Suez, Switzerland. It is the fifth largest financial group in the world and the second largest bank in Switzerland. In 2022, it ranked 494th in the Fortune Global 500 list.
Credit Suisse is an investment bank and financial services company, engaged in personal and corporate financial services, banking products, pension and insurance services. It has branches in more than 50 countries, with a total investment of US$ 24.5 billion and property under management of 1 1 95.3 billion Swiss francs. In addition to operating bulk and retail banking business in Switzerland, Credit Suisse's international services also focus on specialized bulk banking business. In its extensive services, Credit Suisse has combined its proprietary technology, abundant funds, unique care and neutrality in Switzerland to ensure attractive services. Credit Suisse's outstanding performance in the banking industry lies in the rapid growth of its customers and partners, and it has become one of the world's top 50 banks with a huge capital of 65.438+85 billion Swiss francs.
Credit Suisse Group first acquired ——Leu Bank, the fourth largest bank in Switzerland, on 1990, and 1993 acquired Swiss People's Bank, the fifth largest bank in Switzerland. At present, the parent company and business department of Credit Suisse Group are rated as A 1 and AA by internationally renowned rating agencies.
According to the data, Credit Suisse Group consists of four banking departments and one insurance department. At present, Credit Suisse Group is one of the largest financial groups in the world, with total assets worth $435 billion. In terms of global revenue, Credit Suisse Group ranks second in the world; In terms of capital base, Credit Suisse Group ranks 16 in the world. The investment banking department of CSFB Group is one of the top five investment banks in the world. The total assets of the private banking department are US$ 280 billion, ranking second in the world, while Fengtai Insurance Company is the fifth largest insurance company in Europe. Credit Suisse Group currently has 63,000 employees, 60% of whom are in Switzerland and the rest are distributed all over the world. (Article source: National Business Daily)