Credit Suisse has had a lot of disasters this year, especially the trouble from the Archegos explosion may not have been fully resolved.
As one of the biggest victims of the family fund Archgos thunderstorm.Credit Suisse initially estimated a huge loss of 600m Swiss francs ($654 million) in the second quarter, and sources were quoted on Wednesday as saying that Credit Suisse's Archegos-related exposure was as high as $20 billion, much higher than previous estimates.
Credit Suisse's CEO Thomas Gottstein and Lara Warner, the chief risk officer who recently announced that he was leaving, did not know so much about Archegos until a few days before he was forced to liquidate his position. Sources also said that Archegos bet on a surge in equity investment, but Credit Suisse did not fully operate the system to match this growth, and some Credit Suisse insiders had thought that the bank's exposure was only a fraction of the $20 billion.
Last week, Credit Suisse sold about $2 billion in shares related to the Archgos incident, the second big sell-off after the bank wrote down most of its exposure in the first quarter. The bank said on Thursday it had sold 97 per cent of its positions related to the incident.
Archegos is the second major financial dilemma that Credit Suisse has fallen into in less than half a year. Earlier this month, Credit Suisse closed its $10 billion supply chain finance fund that held Greensill bonds and overhauled its asset management division after the collapse of Credit Suisse's management under pressure from Greensill, a supply chain finance company.
JPMorgan Chase analysts Kian Abouhossein and Amit Ranjan believe that the dual impact of Archgos and Greensill on Credit Suisse could reach $8.7 billion.
Regulators have asked Credit Suisse to hold more capital. The bank has suspended share buybacks and cut dividends. Bloomberg said the two incidents would lead to strict regulatory scrutiny of Credit Suisse.
On Thursday, credit suisse's European shares fell by 6%. Credit Suisse shares have fallen more than 20 per cent so far this year.