Credit Suisse overhauls management as it takes $4.7 billion hit on Archegos
Brenna Hughes Neghaiwi, Matt Scuffham, 06 April 2021
ZURICH (Reuters) -Credit Suisse said on Tuesday it will take a 4.4 billion Swiss franc ($4.7 billion) hit from dealings with Archegos Capital Management, prompting it to overhaul the leadership of its investment bank and risk division.
The scandal-hit bank now expects to post a loss for the first quarter of around 900 million Swiss francs. It is also suspending its share buyback plans and cutting its dividend by two thirds.
Switzerland’s No. 2 bank, which has dumped over $2 billion worth of stock to end exposure to Archegos, said Chief Risk Officer Lara Warner and Brian Chin, the bank’s investment banking head, were stepping down following the losses.
“The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable,” Credit Suisse Chief Executive Thomas Gottstein said in a statement. “Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history.”
