The Swiss economy is expected to suffer its biggest contraction since the mid-1970s this year, with financial stability risks increasing globally due spiraling corporate and state debt, Bloomberg News reported. “The risk of upheaval on the financial markets and further upward pressure on the Swiss franc is high,” Switzerland’s the State Secretariat for Economic Affairs said in a statement on Tuesday. Like many advanced economies, momentum in Switzerland tanked after theaters, shops and restaurants got shut down in a bid to control the outbreak.
Switzerland has opened a probe related to $2 billion of loans to Mozambique that were organized by banks including Credit Suisse Group AG and VTB Bank PJSC, in a scandal that has already attracted the attention of prosecutors in the U.S, Bloomberg News reported. The criminal probe started in February against “persons unknown” on suspicion of money laundering in connection with the credit, the Office of the Attorney General said on Friday. The target of the proceedings is not any specific person or entity, the office said.
To the analysts at UBS Global Wealth Management, the $3.9 trillion municipal-bond market is heading into the biggest financial storm anyone has ever seen, Bloomberg News reported. The nation’s swift economic collapse is hitting virtually every corner of the market, which extends far beyond states and cities with the power to raise taxes. Nursing homes that have sold tax-exempt debt are being ravaged by the outbreak. College dormitory operators are facing vacancies, while small private schools that were already competing for students face uncertain prospects.
Switzerland and Austria pledged to help Lufthansa with state-backed loans as the German airline pursues talks with Berlin over a 9 billion euro ($9.8 billion) rescue package, Reuters reported. The Swiss government said on Wednesday it will ask parliament for 1.275 billion francs in loan guarantees for Lufthansa (LHAG.DE) units Swiss and Edelweiss. Strict travel restrictions to contain the coronavirus pandemic have brought flights to a near-halt across the world and there is no end in sight for when they can restart, leaving many airlines begging governments for rescue packages.
UBS Group AG expressed confidence it can withstand a surge in bad loans while warning that the unprecedented outbreak will put pressure on key streams of income at its wealth management business, Bloomberg News reported. The bank -- which posted a 40% jump in profit to $1.6 billion -- said falling asset prices will erode recurring fee income while low interest rates hit lending income. Despite an expected drop in client activity, UBS indicated the “high quality” of its credit portfolio may shield it from more widespread defaults.
The Swiss economy is expected to suffer its biggest contraction since the mid-1970s this year and recover only slowly in 2021, the government revealed in a bleak new outlook, Bloomberg News reported. The State Secretariat for Economic Affairs in Bern slashed its forecast on Thursday, saying the economy was expected to shrink 6.7% in 2020, faring worse than it did during the financial crisis. That’s because in addition to the downturn globally, private consumption in Switzerland would face headwinds from rising unemployment and people’s uncertainty about the future.
Credit Suisse Group AG was stung by the collapse of Luckin Coffee Inc. in China following an accounting scandal, which led to a five-fold increase in Asian loan-loss provisions, Bloomberg News reported. The Swiss bank set aside 97 million Swiss francs ($100 million) for soured loans, primarily related to three cases, the largest of which was Luckin Coffee, according to a person familiar with the matter. The bank only referred to a “Chinese food and beverage company” in its earnings statement Thursday.
Swiss-based sporting goods group Intersport’s main franchisee in Sweden has filed for a court-led restructuring as it seeks to avert bankruptcy in the face of falling sales because of the COVID-19 pandemic, Reuters reported. Intersport AB, which employs about 2,000 people, said in a statement on Tuesday that it needs temporary relief from creditors to weather the downturn after a sharp decline in sales left it without adequate cash to pay all of its bills. “This is an extraordinary measure ...
The Swiss watch industry has survived lickings before, but Rolex, Omega and Cartier now face a combination of economic punches putting them back on their heels, Bloomberg News reported. The industry was just adapting to the downturn from political protests in its largest market, Hong Kong, when the coronavirus outbreak hit. Now as China’s economic slowdown is set to engulf the rest of the world, the strong Swiss franc, surging gold prices, and store closures are set to saddle companies like Swatch Group AG and Richemont with higher costs.
The Genevan jeweler De Grisogono SA, known for extravagant diamond jewelry worn by the likes of Paris Hilton, filed for bankruptcy, ensnared in a corruption probe involving Isabel dos Santos, the daughter of Angola’s former president, Bloomberg News reported. De Grisogono couldn’t secure a buyer despite talks that lasted several months, the company said in a statement on Wednesday. The failed negotiations forced the company to file for creditor protection with Swiss authorities, which if accepted, will affect 65 jobs in the nation, the company said.