Credit Suisse had a pretty good first quarter – apart from a $4.8 billion loss on exposure to a single client, family office Archegos, which called to mind the old joke about asking Mrs Lincoln how she liked the play otherwise.
In walking analysts through the bank’s results on Thursday April 22, chief executive Thomas Gottstein and finance head David Mathers tried to accentuate the positives.
Admittedly there will be another $650 million charge against Archegos in the second quarter and Credit Suisse is still not in a position to estimate how much its involvement with funds linked to failed lender Greensill will cost.
Wealth management performance was fine, nevertheless, and core investment bank businesses delivered results that would be cause for celebration in other circumstances.
Capital markets revenues surged to over $1 billion, for an increase of more than 500% compared to a weak first quarter of 2020, helped by strength in areas such as special purpose acquisition company (Spac) launches and a leveraged finance franchise that ranks second only to JPMorgan.
A long-term project to sell markets products such as equity derivatives to wealth management clients hit a new revenue record. Credit trading performed well.
