Deutsche Bank, Barclays Seen Losing Millions Amid Swiss Rout

Bloomberg Jan 16, 2015

Deutsche Bank AG and Barclays Plc (BARC ▼ -1.58% 224.35), two of the world’s largest currency dealers, were among the first banks to suffer losses after the Swiss central bank’s surprise decision to abandon a cap on the franc, people with knowledge of the matter said.

Deutsche Bank lost $150 million on Thursday amid an unexpected surge in the Swiss franc, said one of the people, who asked not to be identified because the figure hasn’t been made public. Barclays’s losses were less than $100 million, another person said. The losses are still being calculated, and may spread to other asset classes, including equities, one of the people said.

The Swiss National Bank’s decision to scrap the three-year-old ceiling sent the franc up as much as 41 percent versus the euro, while climbing more than 15 percent against all of the more than 150 currencies tracked by Bloomberg. Two brokers, Global Brokers NZ Ltd. and Alpari (UK) Ltd., said they were forced to shut down amid continuing market turmoil.

Barclays’s losses won’t have a material impact on results and the London-based bank is able to fulfill all spot Swiss currency trades made, said the person.