Heads & bonuses roll at Credit Suisse as Archegos scandal trigger losses
The Swiss bank has wielded the axe after revealing it faces massive losses from the collapse of US hedge fund Archegos.
The Swiss bank today admitted its first quarter was likely to see a loss of £690 million after it was hit by last month’s blowout of the Archegos Capital hedge fund and said it would cut its dividend and executive bonuses and shed key executives.
The international banking giant is looking increasingly accident prone after also finding itself in the middle of the Greensill scandal and today said Brin Chin, CEO of its investment bank, and Lara Warner, chief risk and compliance officer, would both step down. Also, bonuses for the executive board will be scrapped for 2020 and the total dividend cut to 0.1 CHF.
It said it faced a CHF4.4 billion hit from Archegos, which imploded after share price falls meant it suddenly had to sell positions to meet margin calls on stock it had borrowed. It said it would update the market later on its “supply chain finance funds” — a reference to its funds which made big losses for investors by putting their money into Greensill.
Archegos was run by former hedge fund manager Bill Hwang, and Credit Suisse was one of its prime brokers. It said the company had to learn the lessons of both Archegos and Greensill and “reflect on the broader consequences and lessons learned.” An investigatory committee set up to investigate the Greensill issue had now been extended to include the Archegos fiasco.
Christian Meissner, the high-flying Bank of America Merrill Lynch banker who has been Credit Suisse’s co-head of international wealth management investment banking advisory and vice president of investment banking since October will take over as CEO of the investment bank.
Joachim Oechslin, chief of staff to the CEO, will become interim chief risk officer and general counsel Thomas Grotzer interim global head of compliance.
Warner and Chin’s rapid falls from grace followed soon after they were giving enlarged responsibilities under a big cost-cutting overhaul last summer by newish chief executive Thomas Gottstein.