Credit Suisse to book CHF 450m gain in Q4 2019 due to accounting treatment of investment in SIX Group

Maria Nikolova

Credit Suisse has decided to elect fair value accounting under US GAAP in respect of its equity investment in SIX Group AG.

Credit Suisse today announces changes to accounting treatment for its equity investment in SIX Group AG.

Following a review of the accounting treatment of the shares that Credit Suisse holds in the Swiss stock exchange group, Credit Suisse has made the decision to elect fair value accounting under US GAAP in respect of this equity investment.

On the basis of SIX Group’s financial accounts as of June 30, 2019, this is expected to result in a pre-tax gain of at least CHF 450 million in the fourth quarter of 2019, which will be recognised in the corresponding SUB and IWM divisional results. The gain is poised to add approximately 10 bps to Credit Suisse’s year end 2019 CET1 ratio.

Credit Suisse stresses that this is a change in the accounting basis only and that it remains a supportive long term shareholder of SIX Group AG, having increased its holding to 15% in recent years.

Let’s note that SIX has recently announced an all-cash voluntary tender offer for 100% of the share capital of BME for EUR 34.00 per share, implying a total equity value of EUR 2,843 million (CHF 3,108 million).

Credit Suisse is providing SIX with a fully underwritten bridge facility for the funding need of the proposed transaction (assuming 100% acceptance level). The bridge facility is expected to be refinanced by an optimal mix of existing resources and long-term debt market instruments.

Credit Suisse is also acting as an adviser to SIX regarding the deal.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<