Summary List Placement
Credit Suisse stock tanked 14% on Monday, wiping away $5 billion of market value.
The Swiss bank warned of a large loss from Archegos defaulting on its margin call.
Credit Suisse’s loss could be as high as $4 billion, reports say.
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Credit Suisse shares tumbled as much as 14% on Monday after the Swiss bank warned it could suffer a major blow to its first-quarter profits from Archegos Capital Management blowing up. The stock-price slump erased up to 4.5 billion Swiss francs ($4.8 billion) from its market capitalization.
The lender said it joined other banks in issuing margin calls to a US-based hedge fund last week, but the firm — confirmed by multiple news outlets to be Archegos — defaulted. Credit Suisse is now working to exit the related positions, and fears the resulting loss could be “highly significant and material” to its first-quarter earnings, due next month.
Credit Suisse declined a request for comment from Insider.
The bank could stomach a loss of $3 billion to $4 billion, the Financial Times reported, citing two sources. The top end of that estimate would be almost triple its net income in the first quarter of 2020.
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Source:: Businessinsider – Finance