Credit Suisse scrambles to reimburse investors for its Greensill support fund, but expects losses from collapsed company


says Switzerland, the giant investment bank that set up an investor fund to back Greensill before it collapsed, said it had paid them $ 3.1 billion so far and hoped more would follow. .

The banking giant’s funds supporting supply chain finance raked in $ 10 billion from investors, but were wiped out by Greensill’s collapse in power last week.

The bank said in an update to the markets today that it is working with directors Grant Thornton to return their money to investors.

Credit Suisse also granted Greensill a $ 140 million bridge loan last year. Today, he said he received $ 50 million from the trustees, reducing the outstanding loan to $ 90 million.

“While these issues are still at an early stage, we note that it is possible that Credit Suisse may incur costs for these matters,” the bank said in a statement released today.

Credit Suisse has been the subject of much criticism regarding its activities with Greensill founder Lex Greensill.

Not only was he the biggest lender in his business, but he was also a valued wealth management client of his private bank.

The losses it suffers today have raised questions about its management’s policy of cross-selling wealthy private clients to their business assets.

The Financial Times reported that senior Credit Suisse executives canceled risk managers in London to grant Greensill the bridging loan.

The FT reported that Lara Warner, the bank’s chief risk and compliance officer, approved it.

Greensill told a UK court last week that there was “no conceivable way” to pay off the debt.

Much of the funding that Credit Suisse provided through its funds to Greensill was used to lend to Sanjeev Gupta’s GFG metals empire, which has now started to default.

The Wall Street Journal reported that Credit Suisse fired its European head of asset management and two fund managers who worked on Greensill’s supply chain finance funds.

Greensill has provided supply finance loans to businesses that were designed so that they didn’t have to wait 60 or 90 days or more for money from customer orders.

He then bundled together those securities supply chain agreements known as notes that Credit Suisse funds bought. In this way, investors in Credit Suisse funds effectively acted as a form of off-balance sheet financing for Greensill.

The notes were backed by credit insurance, giving fund investors an added sense of security. Some of them are bound by their own investment rules only to support relatively safe investments.

However, an insurer stopped providing coverage, leading Credit Suisse to freeze funds on March 1.

The full repayment of fund investors depends on the number of Greensill borrowers able to repay the loans as they fall due.

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