Credit Suisse Group AG said it would issue new shares after losses from Archegos Capital Management wiped out a strong first quarter, highlighting the damage caused by the collapse of the investment firm.
On Thursday, the bank said it placed notes that convert to stock in six months to counter damage to its capital position from the loss and new charges imposed by the Swiss financial regulator. It said it had only a small remaining exposure to Archegos as of Wednesday after selling 97% of its related positions, but lost another $655 million from them in the second quarter, adding to a $4.7 billion charge in the first quarter.
On Thursday, Switzerland’s financial regulator, Finma, said it opened enforcement proceedings against the bank over how it handled the risks around Archegos.
Revenue at Switzerland’s second-largest bank by assets after UBS Group AG rose 31% to about $8.3 billion from client activity in surging markets. Its loss for the quarter was 252 million Swiss francs, or about $275 million.
Revenue at Credit Suisse’s investment bank was up 80%, buoyed by corporate deal making and selling stock and bonds. Credit Suisse said its wealth management businesses, which doesn’t report as a single division, brought in about $4.23 billion in revenue, up 3% from a year earlier.