Commerzbank’s Online Unit Doesn’t Expect Loss on Franc Move
(Bloomberg) — Comdirect Bank AG doesn’t expect losses from the turmoil that followed the Swiss National Bank’s decision to abandon its cap on the franc, according to Chief Financial Officer Holger Hohrein.
“We as a bank don’t have FX risk. None. We’re not affected at all,” Hohrein said in an interview in Frankfurt Tuesday.
Comdirect, a subsidiary of Commerzbank AG, Germany’s second-largest bank, is in talks with customers about losses they made on the Swiss franc move, involving “very low quantities,” Hohrein said. Most customers choose products that limit risks using low leverage and don’t allow losses beyond their original commitment, he said.
The SNB sent markets into a tailspin on Jan. 15, when the Swiss central bank abruptly abolished its three-year-old policy of limiting the franc’s strength against the euro. The franc surged as much as 41 percent versus the euro that day, the biggest gain on record.
A number of the world’s biggest banks were caught on the wrong side of franc trades, with Citigroup Inc., Deutsche Bank AG and Barclays Plc suffering about $400 million in cumulative trading losses, according to people familiar with the events.
Comdirect doesn’t carry exchange rate risk itself, but offers leveraged financial products, which can magnify customers’ gains and losses on the Swiss currency.
Saxo Bank A/S chief financial officer Steen Blaafalk said the Danish bank is bracing for lawsuits from some clients over its efforts to have them cover losses on their Swiss franc accounts.
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To contact the reporter on this story: Shane Strowmatt in Frankfurt at sstrowmatt@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Cindy Roberts, Jon Menon
