Home Credit report Credit Suisse froze $10.6 billion in sanctioned assets in the first quarter

Credit Suisse froze $10.6 billion in sanctioned assets in the first quarter


The logo of Swiss bank Credit Suisse is seen at its headquarters on Paradeplatz square in Zurich, Switzerland October 1, 2019. REUTERS/Arnd Wiegmann

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ZURICH, May 5 (Reuters) – Credit Suisse (CSGN.S) froze 10.4 billion Swiss francs ($10.63 billion) in wealthy client assets in the first quarter under sanctions imposed under the of Russia’s invasion of Ukraine, according to the bank’s financial report. Thusday.

The Swiss bank’s financial report gave more details on its first-quarter results, which were originally released last week. Read more

“In 1Q22, CHF 10.4 billion of assets under management were reclassified as assets under custody due to imposed sanctions,” Credit Suisse said of its wealth management division.

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The financial report showed that an impact of 10.4 billion francs on the bank’s wealth management assets was linked to the assets frozen due to the sanctions.

The bank also said Russian clients now hold less than 4% of assets under management in its wealth management business.

Last week, Credit Suisse announced a net loss of 273 million Swiss francs in the first quarter, marred by net provisions for litigation of 703 million francs as well as by an impact of 206 million francs linked to the conflict in Ukraine. Read more

The financial report published on Thursday showed that gross bad loans increased by 230 million francs compared to the end of 2021 in wealth management.

Credit Suisse said this was “primarily driven by aviation and yacht financing, Lombard loans, export financing and European mortgages, partially offset by a decrease in ship financing.”

“The increase in impaired loans includes the negative effects of Russia’s invasion of Ukraine and related sanctions,” the bank said.

Credit Suisse said it was “continuously assessing the impact of the sanctions already imposed, the Russian government’s countermeasures and potential future escalations, on our exposures and our relationships with our clients.”

The bank also pointed to China’s strict COVID-19 lockdowns which have heightened concerns about further disruptions to global supply chains and upward pressure on inflation.

Credit Suisse said liquidity and solvency issues persist in China’s property development sector, with potentially negative effects on the Chinese economy and global markets.

“We are closely monitoring the risk management implications of these developments on our Lombard loan portfolio in China, the exposures of our trading and lending portfolio to Chinese local governments and Chinese state-owned enterprises, as well as the trend towards accelerating defaults in the onshore corporate debt market.”

The bank said it expected a legal case in Bermuda to cost around $600 million.

A Bermuda court ruled in March that former Georgian prime minister Bidzina Ivanishvili and his family owed damages “substantially over $500 million” from the local life insurance arm of Credit Suisse. The bank has announced its intention to appeal the verdict. Read more

($1 = 0.9784 Swiss francs)

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Reporting by Michael Shields and Brenna Hughes Neghaiwi, editing by Kirsti Knolle, Sherry Jacob-Phillips and Jane Merriman

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