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(Bloomberg) — Credit Suisse Group AG warned it may take a financial hit after the implosion of Greensill Capital forced it to freeze $10 billion of funds and put a loan to the firm at risk, threatening to spoil what had been the bank’s best start to a year in a decade.The lender said Tuesday that while it’s still early, it may need to book a charge related to business it conducted with Greensill Capital, including a loan it extended before the firm filed for insolvency. That prospect overshadowed an otherwise strong start to the year, with revenue at the investment bank up more than 50% in the first two months and pretax income for the group the best in 10 years.The collapse of Credit Suisse’s supply chain finance funds, which it ran with Greensill, has pushed Switzerland’s second-biggest bank into the deepest crisis since Chief Executive Officer Thomas Gottstein took over a year ago. The CEO, who’s already had to contend with a series of past missteps and losses in his first year at the helm, is facing questions about controls and risk management, not least because he ordered a review of the funds just last year that subsequently failed to prevent their collapse.“I would be lying if I said supply chain wasn’t adistraction,” Gottstein said at a conference on Tuesday, in some of his first public comments since the scandal broke. “I cannot promise a specific result —- my lawyers wouldn’t allow me to do that -— but I can promise I will undertake all efforts to reach the best possible outcome for our supply chain fund investors”Shares of Credit Suisse rose 1.7% as of 2:29 p.m. in Zurich. The stock lost almost 9% this month before Tuesday, compared with a small gain for UBS Group AG, its closest rival.The Swiss bank joined German rival Deutsche Bank AG, which also flagged a “strong start to 2021” when it presented its annual report last week. Deutsche Bank still expects revenue to decline this year after a particularly strong trading performance in 2020.Credit Suisse had already indicated last month that it saw a substantial increase in client activity in the early part of 2021, benefiting the key private banking business and the investment bank. The latter unit reported revenues of 2.08 billion francs ($2.24 billion) in the first quarter of last year.Analysts have said that while the financial hit from the Greensill debacle to Credit Suisse is likely to be limited, the reputational damage is only just unfolding. Credit Suisse said it recovered $50 million recently of a $140 million loan it made to Greensill Capital late last year. The remainder of the loan is collateralized, Gottstein said, without detailing how much he expects to recover in total.The bank had brushed off concerns from some risk managers about the loan, which was made just months before the firm’s collapse, people familiar with the matter have said.More damaging, at least in terms of reputation, was the decision to freeze four funds that had been presented to investors as some of the safest in the bank’s lineup. Credit Suisse said the money pools expect to return more capital to investors in coming months, after paying out about $3.1 billion so far. The bank has an additional $1.25 billion in cash across the four funds as money has continued to roll in from the Greensill-arranged notes, Gottstein said at the annual Morgan Stanley European Financials Conference.The funds’ collapse was triggered by the refusal of a major insurer — Tokio Marine Holdings Inc. — to extend new coverage for the assets. In a statement on Tuesday, Credit Suisse said that the bank’s chief risk and compliance officer, Lara Warner, was only informed about that imminent risk a week before the funds were gated.Lex Greensill has said in court documents that he kept top Credit Suisse officials informed of his difficulties in securing fresh insurance for weeks before his supply-chain finance empire’s abrupt collapse. The insurance on the assets was one reason why Credit Suisse had presented them as so safe.“While we do not expect Credit Suisse to pay for investor losses, we see potential legal risk and ongoing regulatory scrutiny,” JPMorgan Chase & Co. analyst Kian Abouhossein wrote in a note to clients. “Greensill could be a material setback” to efforts by Gottstein to move on from writedowns and legal costs.(Updates with comments from Credit Suisse CEO in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.