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September 28, 2021

Credit Suisse to repay $400m to Greensill investors

By Verdict Staff

Credit Suisse is set to repay an additional $400m this week to investors in insolvent supply chain finance funds linked to collapsed British financial services firm Greensill Capital.

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The asset management arm of the Swiss bank said in an update that with the latest payment, the total amount of the $10.1bn line of funds returned to clients will be $6.3bn.

It also added that the further liquidation proceeds will be paid out to investors as soon as practicable in one or more instalments.

Credit Suisse’s Greensill woes

Credit Suisse, which was a key source of funding for Greensill Capital, is associated with selling around $10bn worth of Greensill-created securities through its asset management unit.

The Swiss bank came under the regulator’s lens following the default of Greensill.

The bank also launched an internal probe to investigate the role of its executive board member, including CEO Thomas Gottstein, in the events leading to the scandal.

Soon after the Greensill collapse, the bank decided to separate its asset management business from its international wealth management unit.

This move was part of the bank’s strategy to limit the effect of the Greensill scandal from distressing its other businesses.

At present, Credit Suisse is looking to recover funds from major Greensill customers. The bank is expected to update the portfolio details to the fund investors next month.

Archegos and Evergrande scandals

Credit Suisse took a $4.7bn hit from the collapse of the US-based hedge fund Archegos Capital, shortly after the breakout of the Greensill scandal.

Archegos increased troubles for the bank, which was already reeling under the Greensill losses.

The bank replaced several executives, nixed executives’ bonuses, trimmed its dividend by two-thirds to CHF0.10 per share and halted share buybacks in the aftermath of the second scandal.

The exposure to Archegos also affected Credit Suisse’s Q2 2021 profit. The quarterly net profit plummeted 78% year-on-year to $278.45m (CHF253m).

Meanwhile, Credit Suisse denied direct exposure to Evergrande, a Chinese developer currently on the brink of default.

The firm, which was once a major underwriter of Evergrande bonds, scrapped its complete exposure to the debt-ridden Chinese developer after becoming concerned about its financials.

However, the past ties with Evergrande are anticipated to result in fresh trouble for the scandal-ridden bank.

Free Report
img

How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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