ABN AMRO records loss of USD 200 million on one client

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nastazio151

ABN AMRO records incidental net loss of USD 200 million

As a result of the unprecedented volumes and volatility in financial markets following the outbreak of COVID 19, ABN AMRO Clearing will incur a USD 250 million pretax incidental loss on one of its US clients. The net loss is approximately USD 200 million (EUR 183 million).
The client had a specific strategy, trading US options and futures, and failed to meet the minimum risk and margin requirements following extreme stress and dislocations in US markets. To prevent further losses, ABN AMRO Clearing decided to close-out the positions of this client. The impact will be included in the first quarter 2020 results of ABN AMRO.

Must have been a hell of a trade... Ronin?
 
Must have been one of those World Cup Trading Championships traders on account #12. Account blew up - don't need to include in competition results!
 
That’s strange, how come they don’t even try to recover the shortfall from the client/ firm? The timeline being so fast seems to indicate they just gave up immediately on collection

I mean, 200m is probably no small potatoes even to a place like ABN, so how come they’re not putting a team on this
 
pinetboltz said:
That’s strange, how come they don’t even try to recover the shortfall from the client/ firm? The timeline being so fast seems to indicate they just gave up immediately on collection

I mean, 200m is probably no small potatoes even to a place like ABN, so how come they’re not putting a team on this
More...

Might just be accounting. Write it off this quarter, include recovered amounts next?
 
pinetboltz said:
That’s strange, how come they don’t even try to recover the shortfall from the client/ firm? The timeline being so fast seems to indicate they just gave up immediately on collection

I mean, 200m is probably no small potatoes even to a place like ABN, so how come they’re not putting a team on this
More...


Funny how people speculate without having slightest clue about who the client is, how many assets they have, how many creditors they have, whether level of potential collection was already evaluated, whether it’s a person or a firm, how much government stimulus the client will receive, or whether he/she is alive.
 
nastazio151 said:
ABN AMRO records incidental net loss of USD 200 million

As a result of the unprecedented volumes and volatility in financial markets following the outbreak of COVID 19, ABN AMRO Clearing will incur a USD 250 million pretax incidental loss on one of its US clients. The net loss is approximately USD 200 million (EUR 183 million).
The client had a specific strategy, trading US options and futures, and failed to meet the minimum risk and margin requirements following extreme stress and dislocations in US markets. To prevent further losses, ABN AMRO Clearing decided to close-out the positions of this client. The impact will be included in the first quarter 2020 results of ABN AMRO.

Must have been a hell of a trade... Ronin?
More...

That's what I was thinking. I thought Ronin was a Clearing Member of the CME Exchange but their trades were processed by ABN AMRO. Not sure what the financial arrangement was between the two firms.
 
This is what happens when even pre-trade/post-trade risk management systems are not quite "functional"...LOL!

I guess, risk manager will be relocated or fired. Credit manager bonus payment deferred to 2035.....
 
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