Credit Suisse will suffer a 4.4 billion francs (3.4 billion) blow from the collapse of Archegos Capital Management and ousted two of its executives as the fallout from the crisis continues.
Credit Suisses investment bank chief Brian Chin and chief risk officer Lara Warner step down as bank braces for CHF 900m first quarter loss due to sell exposure $ 20 billion Archegos Capital Management fire that rocked Wall Street.
Christian Meissner, one of the best-known dealmakers in the field of investment banking, who joined the Swiss bank as co-head of an international advisory role in investment banking in wealth management in October, will take charge of investment bank Credit Suisses, he said in a statement. .
At the same time, Warner, who was only appointed Chief Risk Officer and Compliance Officer in August as part of a job overhaul plan, will also resign. Joachim Oechslin will temporarily replace Warner, while General Counsel Thomas Grotzer has been appointed Acting Chief Compliance Officer.
The move means some of Credit Suisses ‘senior executives were ousted due to Swiss banks’ exposure to the family office of hedge fund manager Bill Hwang, which was forced to sell around $ 20 billion in shares on the 26th. March. The huge margin call made waves on Wall Street, with Credit Suisse and Japanese bank Nomura losing billions.
Credit Suisse said it plans to take a charge of CHF 4.4 billion from a US-based hedge fund to meet its margin commitments, which will push it to a loss of CHF 900 million for the first trimester.
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Thomas Gottstein, chief executive of Credit Suisse, said the loss was unacceptable.
In combination with recent issues regarding supply chain finance funds, I recognize that these cases have raised significant concerns among all of our stakeholders. In collaboration with the Board of Directors, we are fully committed to dealing with these situations. Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history.
Credit Suisse has said it will suspend its planned $ 1.5 billion share buyback program and reduce its dividend, which will be paid by a combination of capital and retained earnings. The bank has said it will not resume share purchases until we have regained our target capital ratios and restored our dividend. He added that he would provide an update on his exposure to supply chain finance company Greensill in the coming days.
The bank’s board of directors will also waive the short- and long-term bonuses awarded this year, while its chairman, Urs Rohner, waived his annual commission of 1.5 million francs.
“Confidence has been hit hard with stocks down 24% since March, or the equivalent of CHF 8 billion,” KBW analyst Thomas Hallett wrote in an April 6 note. “While reducing immediate uncertainty, returns on capital have been reduced and the ability to increase profits and deploy capital is still limited.”
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Chin was installed as managing director of investment bank Credit Suisses in August amid a reshuffle that saw Gottstein reverse former managing director Tidjane Thiam’s decision to separate its sales units and negotiation.
A former analyst at Deloitte, he joined the Swiss bank in 2003, and led its markets activity for four years before taking over the general management of the investment bank.
The rise of Meissner, a former Goldman Sachs trader who led investment bank Bank of Americas for more than a decade before stepping down in 2018, is a remarkable resurgence for the Austrian banker.
Meissner has been credited with overhauling investment bank Bank of Americas after the financial crisis when it merged with Merrill Lynch and expanded its international business. He resigned as the bank lost its risk appetite for the investment bank and lost on some key deals and was replaced by Matthew Koder.
He has been associated with some of the most important jobs in the banking industry during his two years outside the industry, including being seen as a candidate for the top job at UBS, its rival Credit Suisse.
Credit Suisse said the bank also performed very well in its investment banking and increased profits from its three wealth management businesses during the quarter, adding that new net assets were positive in all three. branches, its asset management unit and the Swiss company. and institutional affairs.
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