Credit Suisse To Pay Additional $750 Million In Greensill Crisis

Credit Suisse To Pay Additional $750 Million In Greensill Crisis

Credit Suisse stock (NYSE: CS) has lost 21% YTD, and at its current price of $10 per share, it is trading 15% below its fair value of $12 – Trefis' estimate for Credit Suisse' valuation. The bank has faced several challenges this year including the collapse of Greensill Capital in March – a supply-chain finance business, with which the bank has several ties including $10 billion worth of funds. In a recent development, the firm has agreed to pay out an additional $750 million to investors in its Greensill-linked supply chain finance funds, taking the total amount it has so far paid out to investors in the liquidation proceeds to $5. 6 billion. Despite the growth in the first quarter revenues, the bank reported negative net income in the quarter. It was mainly due to a build-up in provisions for credit losses from $557 million to $4. 9 billion due to the impact of the Archegos Capital crisis. Further, we expect the bank to book more losses related to the crisis in the second quarter. Altogether, CS' net interest margin is likely to suffer in FY2021, resulting in an EPS of $1. 04 for the year, which coupled