Switzerland’s Credit Suisse said on Tuesday it will take a 4.4 billion Swiss franc ($4.7 billion) writedown connected to its exposure to US-based hedge fund Archegos Capital Management — forcing Credit Suisse to cut its dividend and suspend share buybacks.
The company’s Chief Risk and Compliance Officer Lara Warner and its investment bank CEO Brian Chin are among more than half a dozen executives replaced in a management overhaul following the Archegos debacle.
The scandal-hit Swiss bank now expects to post a loss for the first quarter of around 900 million Swiss francs.
Proposed bonuses for Credit Suisse executive board members have been scrapped.
This is the second major scandal for Credit Suisse in just over a month following the collapse of supply chain finance firm Greensill Capital.
Credit Suisse Group CEO Thomas Gottstein said: “The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable.
“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.
“Together with the board of directors, we are fully committed to addressing these situations.
“Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history.”
Credit Suisse added: “We acknowledge that both the US hedge fund and the supply chain finance fund matters require substantial further review and scrutiny.
“The board of directors has launched investigations into both of these matters which will not only focus on the direct issues arising from each of them, but also reflect on the broader consequences and lessons learned.
“We have also undertaken senior management changes within the Investment Bank division and within the Risk and Compliance organization as separately announced today.”
On the management overhaul, Credit Suisse said: “As of May 1, 2021, Christian Meissner is appointed CEO of the Investment Bank and member of the Executive Board.
“Christian has served as Credit Suisse’s Co-Head of IWM Investment Banking Advisory and Vice Chairman of Investment Banking since October 2020.
“Before this appointment, he held various senior positions at leading investment banks, including serving as Head of Global Corporate & Investment Banking at Bank of America Merrill Lynch.
“Prior to that, he was at Lehman Brothers from 2004-2008, where he served as Co-Head of EMEA Investment Banking and subsequently was Co-Chief Executive Officer EMEA.
“Joachim Oechslin is appointed ad interim Chief Risk Officer and member of the Executive Board on an ad-interim basis, effective April 6, 2021.
“After having served as Chief Risk Officer and member of the Executive Board of Credit Suisse Group AG from January 2014 to February 2019, Joachim had taken on the role as Senior Advisor and Chief of Staff to the CEO of Credit Suisse Group.
“Previously, Joachim was Munich Re Group’s Chief Risk Officer from 2007.
“Thomas Grotzer is appointed ad interim Global Head of Compliance, effective April 6, 2021.
“Thomas has served as General Counsel and Member of the Executive Board of Credit Suisse (Schweiz) AG since 2016.
“Previously he held various leadership positions in Credit Suisse’s General Counsel function, including General Counsel Switzerland and Private Banking & Wealth Management. Before joining Credit Suisse, he was UBS’s General Counsel for APAC Wealth Management, based in Hong Kong.
“All three will report to Thomas Gottstein.”