Credit Suisse Out $60M After Chinese Boycott Of Canada Goose

Credit Suisse Group AG, a global financial services group, lost about $60 million after shares it held in Canada Goose plummeted in value during tensions between China and Canada over the arrest of Meng Wanzhou, an executive at Huawei, according to a report in Bloomberg.

Credit Suisse was the underwriter on the sale of 10 million shares by Canada Goose, a Canadian clothing company, at the end of November. The clothing company eyed China as a key location for continued growth.

The shares were priced at $65.15 each, which was a 1.85 percent discount on other sales. However, after the arrest of Wanzhou, Chinese websites called for a boycott of Canadian brands, and the stock lost 20 percent of its value after a four-day freefall.

Eventually, the bank sold the shares at a loss. Credit Suisse said that its 2018 pretax profit guidance of between 3.2 billion francs ($3.2 billion) and 3.4 billion francs has not changed. In mid-December, at the bank’s investor day, the bank said Global Markets would lose capital in Q4, after a surprise loss in Q3.

Credit Suisse has had some issues lately, and the Canada Goose incident adds to its problems. The firm recently got smaller to focus more on wealth management, and the lender, which is fronted by Tidjane Thiam, completed a restructuring program that took three years. It is now trying to convince its investors to stay with them by promising returns and profit growth.

Huawei Chief Financial Officer Meng Wanzhou was officially accused of sanctions fraud by Canadian prosecutors on Dec 7. Officials claim that Meng, who is also the daughter of Huawei Founder Ren Zhengfei had “direct involvement” in a plot to trick U.S. banks into violating sanctions currently in place against Iran.

Ms. Meng was arrested on Dec. 1 in Vancouver by Canadian officials at the request of the United States. The arrest adds complications to an already tense situation between the two nations, which are locked in an ongoing trade war.