Credit Suisse Group AG is committed to returning as much cash as possible to the investors in supply-chain funds linked to collapsed British specialty finance company Greensill Capital (UK) Ltd., CEO Thomas Gottstein told a banking conference March 16.
The Swiss group suspended four funds, holding roughly $10 billion worth of assets originated and structured by Greensill, at the beginning of March, and decided to liquidate them. So far, the bank has repaid $3.1 billion across the four funds, it said in a statement ahead of Gottstein's appearance at the conference.
Greensill is being wound down over valuation concerns. Taking into account the cash Credit Suisse has received since the funds' suspension, the total stands at roughly $4.4 billion, including the already distributed $3.1 billion, Gottstein said. "We are receiving cash on a daily basis, and the funds management companies intend to announce further cash distributions over the coming months and will update fund investors accordingly," he said.
"[O]ur priority is on returning the remaining proceeds from the winding down [of the funds] as soon as practical with maximizing value for the investors," the CEO said. The maturity of most of the underlying receivables and notes is less than 12 months, with only a small share of securities having longer duration, he added. Credit Suisse's asset management arm, Credit Suisse Asset Management (Switzerland) Ltd., invested in these supply chain finance securities via Greensill.
The CEO said the Credit Suisse board is still exploring options to split the asset management unit from the international wealth management, or IWM, division, a review already running before the Greensill affair. To have asset management as a subdivision of IWM was "something that I always had some doubts about," Gottstein said.
Gottstein said he cannot commit to a specific amount that will be recovered from the Greensill funds but promised that Credit Suisse will make every effort "to reach the best possible outcome for our supply-chain funds investors." The group is in close contact with clients, investors in the supply chain finance funds and regulators regarding the Greensill case, he said.
Flying start to 2021 despite saga
He admitted the case has been a "distraction" amid the "excellent" start to 2021 as Credit Suisse booked its best pretax income in the decade for January and February. Performance was strong across the board, but the investment banking and the Asia-Pacific business stood out, he said. Year-to-date revenues in the investment bank exceeded the prior-year result by over 50%.
Credit Suisse is also on track with its share buyback, aiming to complete CHF250 million out of its program by March 31. The Swiss bank announced at the start of the year that it aimed to repurchase up to CHF1.5 billion of its own shares in 2021, aiming at a minimum of CHF1.0 billion by year-end.
