Financial Results

Credit Suisse Says Russian Exposure "Well Managed"

Tom Burroughes Group Editor London 10 March 2022

Credit Suisse Says Russian Exposure

Credit Suisse has an office in Moscow with about 125 colleagues in wealth management and investment banking, in front office and corporate function roles. It has joined other banks in spelling out exposures to Russia, now hit by sanctions and restrictions, including being banned from the global SWIFT system.

Credit Suisse today said that it had SFr848 million ($914.8 million) in net Russia credit exposures as of the end of 2021. Switzerland’s second-largest bank said its exposure to the country was “well-managed.”

The Zurich-listed lender has set out details on Russia’s exposures as part of its annual report. It joins other firms such as UBS, BNP Paribas and UniCredit in spelling out the potential exposures to Russia, which has been hit with sanctions and other measures following the invasion of Ukraine. (See the UBS report here.)

“I speak for the whole Executive Board of Credit Suisse when saying we are deeply saddened by the Russian invasion of Ukraine. We condemn this invasion and the serious breaches of international law,” Thomas Gottstein, chief executive, said. “The instability that these events are creating for societies and countries across the globe will have far-reaching consequences, and our thoughts go out to all those impacted. While we do not have a physical presence in Ukraine, we are committed to providing support to our colleagues and their families within the region. In addition, we have launched a bank-wide appeal in aid of select Red Cross organisations in which Credit Suisse will match the charitable contributions that our employees are making on a one-for-one basis.”

“In purely financial terms, we have reviewed our positions and believe that the bank’s exposure in relation to Russia is well-managed, with appropriate systems in place to address associated risks,” he continued. “As a matter of principle and policy, Credit Suisse applies all sanctions, in particular those issued by the EU, the United States and by Switzerland.”

Explaining its net credit exposure figure, the bank said this included derivatives and financing exposures in the investment bank, trade finance exposures in the Swiss Universal Bank and Lombard and other loans in international wealth management. These net exposures have been reduced since the end of 2021.

Net assets held in the bank's Russian subsidiaries, JSC “Bank Credit Suisse (Moscow)” and LLC “Credit Suisse Securities (Moscow),” totalled SFr195 million as of 31 December 2021.

Country credit risk exposures to Ukraine or to Belarus were not material as of 31 December 2021.

The bank said that, as of 7 March, it had “minimal total credit exposures” towards specifically sanctioned individuals managed by its wealth business.

“Our market risk exposure to Russia as of 9 March 2022 is not significant. Credit Suisse is monitoring settlement risks related to certain open transactions with Russian banks and non-bank counterparties or Russian underlyings as market closures, the imposition of exchange controls, sanctions or other factors may limit our ability to settle existing transactions or realise collateral which may result in changes in our exposure. It is premature to estimate the potential impact of the war in Ukraine on the global economy and markets and on our clients’ risk appetite,” it said.

“However, in the short term, the resultant increase in trading and hedging business activity is expected to be offset by a reduction in capital market issuances due to the rise in volatility as well as by higher credit provisions,” it said.

Credit Suisse has an office in Moscow with about 125 colleagues in wealth management and investment banking, in front office and corporate function roles.

“Their ongoing safety and security is a top priority; we monitor the situation daily and have planned for a number of potential scenarios."

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