Financial Results
Credit Suisse Says No Material Impact From Swiss Franc Drama
Credit Suisse, Switzerland’s second-largest bank, became the latest financial institution in the Alpine state to confirm its financial position in the wake of the surge in the Swiss franc’s exchange rate versus the euro. No material losses have been incurred, it said.
Credit Suisse, Switzerland’s second-largest bank, became the latest financial institution in the Alpine state to confirm its financial position in the wake of the surge in the Swiss franc’s exchange rate versus the euro. No material losses have been incurred, it said.
The bank is due to issue fourth-quarter and full-year results for 2014 on 12 February.
The Zurich-listed lender said that, as disclosed in its third-quarter 2014 announcement last October, the sensitivities of its nine-month 2014 pre-tax profit to 10 per cent moves in the dollar/Swiss franc and euro/Swiss franc stood at SFr439 million and SFr180 million respectively.
“We would point out that the average dollar/SFr exchange rate in 2014 was 0.92 (source: Bloomberg) and the average euro/Swiss franc rate in 2014 was 1.21 (source: Bloomberg) i.e. based on current exchange rates the dollar/Swiss franc is 5 per cent and the euro/Swiss franc 20 per cent below the averages in 2014,” it said, adding that its currency sensitivities have remained broadly unchanged since the end of the third quarter of last year.
“In terms of capital, our policy is to hedge the capital allocated to our non-Swiss based activities. Accordingly, this currency volatility has not materially impacted our capital ratios,” it said.
The bank added that since the Swiss National Bank axed the cap on the Swiss franc versus the euro at SFr1.20, it has reported “positive trading results” and not suffered material trading losses because of forex volatility.
A number of other Swiss institutions, such as Julius Baer and EFG International, have commented on their financial standings due to the Swiss franc saga; Julius Baer said it suffered no losses.
It is estimated that Deutsche Bank, Citigroup and Barclays could have lost up to $400 million in forex-related losses from the drama of last week, when the Swiss currency skyrocketed as much as 40 per cent.