Credit Suisse: India Adds To Global Balance Sheet

India represents the second-largest market for Switzerland-based Credit Suisse AG, with offices in six cities — Mumbai, Pune, Gurugram, Bengaluru, Hyderabad and Kolkata. In fact, the bank’s India operations saw a massive 93% growth in balance sheet at ₹19,189.48 crore, and a 77.72% jump in investments at ₹13,390 crore in FY21. While deposits grew about 86% to ₹5,254.56 crore, advances remained almost flat at ₹1,227 crore. Back in the black, it reported a net profit of ₹330.32 crore in FY21, against a net loss of ₹113.91 crore in FY20. The bank, which launched operations in the country in 1997, provides a range of services, from investment banking and brokerage to wealth management.

It has also sorted some tricky lending accounts. Credit Suisse recently entered into an in-principle settlement with low-cost carrier SpiceJet. In December 2021, the high court had ordered the winding up of SpiceJet for failing to make a payment of $24 million to Swiss maintenance company SR Technics. Credit Suisse had a financing agreement with SR Technics that gave it the right to receive payments from the airline. The bank has also approached the National Company Law Tribunal, seeking recognition for its claim of ₹660 crore as a financial creditor to Reliance Capital, as part of the resolution plan, along with others.

Global Q4 Results

In contrast, the bank reported a $2.2-billion loss from global operations during the October-December 2021 quarter, citing legal and impairment charges, and dwindling revenues. Credit Suisse has been embroiled in a series of high-profile scandals in recent years, especially after chairman Antonio Horta-Osorio resigned in January following repeated violations of Covid-19 quarantine rules.

Horta-Osorio had come in with the intention of cleaning up the bank’s corporate culture after its investment banking division suffered considerable hits in 2021 due to its involvement with collapsed investment firm Archegos Capital and insolvent supply chain finance company Greensill. On November 4, 2021, Horta-Osorio unveiled a three-year revival strategy. The plan, among other things, will pare back Credit Suisse’s investment bank activities by closing down the hedge fund services, and bolster its wealth management division with a $3-billion injection and by adding 500 counsellors. The bank had 3,510 relationship managers globally at the end of March 2020. The strategic shift was adopted across the globe, including in India, with immediate effect. The over 160-year-old bank has operations in over 50 countries, with a significant presence in the Asia-Pacific region. However, its India operations did not involve hedge funds.