Archegos Losses Top $10 Billion as UBS, Nomura Add to Damage
Margot Patrick and Quentin Webb, 27 April 2021
The battering to Wall Street banks from Archegos Capital Management topped $10 billion after UBS Group AG and Nomura Holdings, Inc. reported fresh hits caused by the fund’s collapse.
UBS, Switzerland’s biggest bank by assets, said it lost $774 million following Archegos’s implosion, a bigger hit than analysts expected, deepening the damage caused by the fund.
Meantime, Japan’s Nomura, which flagged losses of around $2 billion last month, upped its total damage tally to $2.85 billion. This included a loss of 245.7 billion yen, equivalent to about $2.27 billion, for the year ending in March, and another 62 billion yen for the fiscal year that started in April.
Nomura said it had taken swift action to shore up its risk-management systems, and had found no similar dealings with other clients. The bank had exited more than 97% of the positions by April 23.
UBS Chief Executive Ralph Hamers, in the job since November, said the bank is taking the incident very seriously, is disappointed and is reviewing its risk management systems to avoid such situations. He said it hadn’t stopped UBS from improving its capital position in the quarter and that the investment bank was able to bear the loss.
