After the debacle, Credit Suisse is going on the offensive with the Greensill funds. With a fee waiver, the major Swiss bank wants to score points with investors in the dissolved funds, as a person familiar with the situation told the Reuters news agency. “This is a gesture of goodwill.” Credit Suisse plans to reimburse clients for most products and services on a quarterly basis. This applies, for example, to fees on securities trading, asset management mandates, investment advice and banking services. Funds of funds from other providers are excluded from the decree. It is not yet clear how long the offer will be valid.
At the beginning of March, Credit Suisse initiated the winding-up of four supply chain financing funds operated jointly with Greensill Capital with a total volume of around ten billion dollars. The trigger was that an insurer no longer wanted to insure new investments in the fund. The British-Australian Greensill then filed for bankruptcy. In the meantime, the bank has secured around seven billion dollars of the total volume and repaid 6.3 billion of this to investors. But repaying the remaining funds should take more time. It is uncertain whether the customers will get all their money back in the end. Many customers to whom the Greensill funds were sold as products with a manageable risk reacted angrily, and some have already taken legal action. Analysts estimated the potential legal costs at $ 2 billion. The institute’s share has lost around 20 percent of its value since the beginning of the year, while other bank shares have risen significantly. That was not only due to Greensill, but to losing deals in connection with the bankrupt hedge fund Archegos.
“Credit Suisse is aware that the situation is not easy for customers who are invested in the supply chain finance funds,” the bank said in a statement. The institute canceled the management fees on the Greensill fund itself in March. Customers who participate in the program would not have to forego possible legal action. The fund shares are distributed among around 1,000 professional investors and the super-rich who are part of the core clientele.
The Swiss financial regulator Finma initiated formal proceedings against Credit Suisse in connection with Greensill in March. At the end of September, the police raided offices and confiscated documents. According to the institute, the proceedings are not directed directly against the financial institution. Credit Suisse has also commissioned its own investigation into the Greensill incidents. It is not yet known when the corresponding report will be published.