Document shredding not related to Russia oligarch sanctions

Credit Suisse told CNBC Wednesday that U.S. authorities will “absolutely not” find any evidence of wrongdoing as it faces a probe on its compliance with sanctions on Russian oligarchs.

The Swiss bank is under investigation by the House Oversight Committee over allegations that it asked investors to “destroy and permanently erase” documents related to a portfolio of loans backed by yachts and private jets potentially owned by sanctioned Russian oligarchs.

Credit Suisse allegedly sent the request to investors following a report first surfaced by the Financial Times that it had offloaded the risks relating to $2 billion of loans to a group of hedge funds.

CEO Thomas Gottstein said Wednesday that the letter received by investors had “nothing to do” with sanctions or loans belonging to members of President Vladimir Putin‘s inner circle.

“[It] has nothing to do with destroying materials related to sanctions,” Gottstein told CNBC’s Geoff Cutmore.

“This was a one-off transaction, which was very much a continuation of three other securitized transactions we did before,” he continued.

“It was part of our dealing with private placement investors, institutional investors, and there were absolutely no materials in there that were relevant from a sanctions perspective.”

Asked whether the bank had any case to answer, Gottstein said “absolutely not.”

According to the FT, the request letters were sent during a week in which the U.S., U.K. and EU launched a fresh wave of sanctions against Russia over its unprovoked invasion of Ukraine.

Gottstein also defended the bank’s position on Russian business, saying that like other major Wall Street and European banks it was winding down its operations there in the wake of the war.

“As everybody else, we are winding down our Russia business,” he said, reiterating an announcement made last month.

Going forward, Gottstein said the bank would not be taking on “any new business, any new clients” from Russia, while also continuing to wind down its exposure to existing Russian clients.

“Our total exposure to Russian clients — that includes Russian clients all over the world, not only the Russian clients in Russia — and we have been reducing this by 56% in terms of our credit exposure,” he said.

The remarks follow the release of Credit Suisse’s first quarter 2022 financial results Wednesday, in which it reported a net loss of 273 million Swiss francs ($283.5 million).

Russia-related losses accounted for 206 million Swiss francs of the losses, while the bank also took a hit of 155 million Swiss francs related to the Archegos scandal.

Gottstein has previously stated that roughly 4% of the assets the bank manages in its core wealth management business belong to Russian clients.

“We have roughly 4% of our assets under management in wealth management with Russian clients, be they Russian-domiciled or Russian nationals who live in the West,” Gottstein said, according to Reuters. That figure has not changed significantly since, the bank said in an update Wednesday.