Credit Suisse loses $5 billion in market value after warning of a big hit following Archegos blow-up
Credit Suissestock tanked 14% on Monday, wiping away $5 billion of market value.
- The Swiss bank warned of a large loss after a hedge fund defaulted on its
- 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 a US-based hedge fund 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
Credit Suisse declined a request for comment from Insider.
The bank could face 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.
The stark warning strikes a sharp contrast to Credit Suisse's bullish trading update earlier this month. The lender said it generated the most pre-tax income in a decade in both January and February, and its overall investment-bank revenues were tracking more than 50% ahead of last year.
Credit Suisse is already embroiled in the Greensill Capital fiasco. It's only managed to claw back $50 million of the $140 million it loaned to the hedge fund, which filed for insolvency this month.
Archegos is the family office of
Archegos was forced to liquidate more than $20 billion of leveraged equity positions last week. The fire sale hammered
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