Credit Suisse will absorb a $4.7 billion writedown in the wake of the Archegos blow-up - and says several top executives are leaving
Credit Suissedisclosed a $4.7 billion hit on Tuesday after the Archegos Capitalmeltdown.
- Investment bank CEO Brian Chin and risk boss Lara Warner are leaving the bank in April.
- The European lender has proposed a
dividend cutand waived bonuses for the 2020 financial year.
Credit Suisse warned on Tuesday it expects to suffer a $4.7 billion charge to its first-quarter profits following the failure of a US-based
The European lender sees an overall loss of $958 million for the first quarter after two significant crises this year. The Archegos blow-up led to major
Credit Suisse CEO Thomas Gottsein will remain at the bank's helm. But the lender's chief risk officer, Lara Warner, is departing on Tuesday. The head of its investment bank, Brian Chin, will leave by the end of April. Joachim Oechslin has been appointed as Warner's interim replacement, while Christian Meissner will take over Chin's role.Insider has learnt that Paul Galietto, head of equities sales and trading, is also stepping down. He will be temporarily replaced by Anthony Abenante, global head of execution services.
Read more: Annabelle Huang has gained over 10,200% on her first ether purchase. The partner of the billion-dollar Amber Group shares how she pivoted from traditional financial services to crypto - and 2 emerging blockchain opportunities on her radar.Thomas Grotzer, who previously served as general counsel and an executive board member, has been appointed as the bank's global head of compliance with immediate effect. Archegos Capital, the highly-leveraged family office of former "Tiger cub" Bill Hwang, triggered a $20 billion forced liquidation of its holdings last month.
The fund collapsed after bets it made in stocks such as ViacomCBS, Tencent, and Baidu tumbled below a certain level, leaving its bankers with collateral that wasn't worth as much. Its lenders, fearing that Archegos could default on its margin obligations at any moment, exited their positions.
"The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable," Gottstein said in a statement. "In combination with the recent issues around the supply chain finance funds, I recognize that these cases have caused significant concern amongst all our stakeholders."
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