Credit Suisse ousts investment bank, risk chiefs as it takes $6.3b Archegos hit

On April 5, Credit Suisse started unloading stocks tied to the Archegos blow-up. PHOTO: REUTERS

ZURICH (REUTERS, BLOOMBERG) - Credit Suisse on Tuesday (April 6) said it was replacing two top executives as it grapples with an estimated 4.4 billion Swiss franc (S$6.3 billion) writedown tied to the collapse of Bill Hwang's Archegos Capital Management.

Chief risk officer Lara Warner and investment banking head Brian Chin will both leave the bank in April, Switzerland's second largest lender said.

The bank said it now expects to post a pre-tax loss of roughly 900 million francs, as its strong performance in the quarter was wiped out by the affair

Defaults on margin calls by Archegos, a family office run by former Tiger Asia manager Bill Hwang, caused a clutch of banks to rapidly unwind billions of dollars of his leveraged trades last month.

Mr Chin was promoted to chief executive officer of the investment bank last year when chief executive officer Thomas Gottstein merged the unit with trading operations after the departure of former CEO Tidjane Thiam. The restructuring marked a victory for Mr Chin, who helped transform the business from a perennial under-performer during a large part of Mr Thiam's tenure to a key profit contributor. In 2016, Mr Chin was named chief executive of global markets and joined the bank's executive board.

Mr Gottstein took over in February 2020 in the wake of a spying scandal that took down his predecessor. He pledged a clean slate for 2021, but the firm has instead been overwhelmed by repeated lapses in oversight, including major hits from the collapse of Greensill Capital and the Archegos turmoil.

Credit Suisse started unloading stocks tied to the Archegos blow-up on Monday - more than a week after some rivals dumped their shares and skirted losses.

The Swiss bank hit the market with block trades tied to ViacomCBS, Vipshop Holdings and Farfetch that totalled more than US$2 billion (S$2.68 billion) at current prices, a person with knowledge of the matter said. The stocks are trading substantially below where they were last month before the implosion of Archegos.

Shares in the three companies declined in post-market trading, as did US-listed shares of Credit Suisse.

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