A Swiss flag flies over a Credit Suisse sign in Bern, Switzerland
FABRIC COFFRINI | AFP | Getty Images
Credit Suisse announced several senior executives leaving Tuesday and proposed cutting its dividend as it weighs the heavy losses from the Archegos Capital saga.
“In particular, following the major US hedge fund issue, the board of directors is changing its proposal to distribute dividends and withdrawing its proposals for variable compensation for the board of directors,” the Swiss lender said in a trade update.
Brian Chin, CEO of the Investment Bank, and Lara Warner, Chief Risk and Compliance Officer, will be stepping down from their roles with immediate effect, the bank said.
Last week, Credit Suisse announced that it was expecting heavy losses following the collapse of US hedge fund Archegos Capital. The bank was forced to deposit a significant amount of shares to disconnect from the troubled family office and now expects a pre-tax loss of around CHF 900 million ($ 960.4 million) in the first quarter .
“This includes a charge of CHF 4.4 billion for the failure of a US-based hedge fund to meet its margin commitments announced on March 29, 2021,” added Credit Suisse.
The board has also waived its bonuses for the 2020 financial year, announced the bank. Chairman Urs Rohner waived his “chairman fee” of 1.5 million francs.
At its Annual General Meeting on April 30, Credit Suisse, together with the amended compensation report, will propose a dividend of CHF 0.10 gross per share.
Last month, the bank announced a restructuring of its wealth management business and a suspension of bonuses to contain the damage from the collapse of UK supply chain finance firm Greensill Capital.
The Board has launched two separate inquiries into the Greensill and Archegos sagas, to be conducted by third parties, “to examine not only the direct problems that arise from each of them, but also the wider implications and lessons learned . ” “”
On May 1, Chin will be replaced at the head of the investment bank by Christian Meissner, currently Co-Head of the international wealth management investment banking advisory service at Credit Suisse and Deputy Chairman of Investment Banking.
Joachim Oechslin was appointed Interim Chief Risk Officer and Thomas Grotzer Interim Global Head of Compliance on Tuesday. All three report to CEO Thomas Gottstein.
“The substantial loss in our Prime Services business due to the failure of a US-based hedge fund is unacceptable,” Gottstein said in a statement.
“Combined with the recent supply chain finance fund issues, I have found that these incidents have caused significant concern to all of our stakeholders. Together with the Board of Directors, we are determined to address these situations. Serious lessons are learned. “”
This is a developing story and will be updated shortly.
