Swiss Bank joins list of derivatives casualties
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SWISS BANK Corporation became the latest casualty of the bond and derivatives shakeout yesterday as it reported a 63 per cent drop in first-half trading income to Sfr537m ( pounds 275m).
There was strong speculation in the City that SBC's London bond-trading operation had suffered badly. SBC blamed the larger-than-expected fall in profits on difficult market conditions for bonds and interest rate instruments. On Monday HSBC, Midland Bank's parent, said it had ceased all bond-trading for its own account after a near- pounds 500m drop in first-half dealing profits.
SBC said it had performed above expectations in trading in European equities, while results from bond and interest rate instruments were below forecasts.
The unexpected rise in US interest rates in February was the culprit, despite a 14 per cent growth in volumes for foreign exchange, interest rate and other derivative products in the first half.
Six-month consolidated pre- tax profits, fell 36 per cent to SFr438m. SBC said the environment in the first half compared badly with bumper securities markets in 1993 when it reported a 36 per cent group net profit increase to SFr1,365m from 1992.
In 1993, SBC reported provisions of SFr2,770m, up 44 per cent from 1992.
View from City Road, page 27
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments