A Swiss flag flies over a Credit Suisse sign in Bern, Switzerland
FABRICE COFFRINI | AFP | Getty Images
On Tuesday, Credit Suisse announced several layoffs and proposed a reduction in the dividend, as it weighs on the losses of the Archegos Capital saga.
“Particularly following the important issue of hedge funds based in the United States, the Board of Directors amends its proposal on the distribution of dividends and withdraws its proposals on variable compensation from the Executive Board,” the Swiss lender said in a commercial update.
Investment Bank CEO Brian Chin and head of risk and compliance Lara Warner will step down with immediate effect, the bank said.
Last week, Credit Suisse revealed that it expected large losses following the fall of US hedge fund Archegos Capital. The bank was forced to take a significant amount of shares to break ties with the troubled family office and now expects a pre-tax loss in the first quarter of about 900 million Swiss francs ($ 960.4 million) ).
“This includes a charge of 4.4 billion Spanish francs for a hedge fund based in the United States not meeting its margin commitments as we announced on March 29, 2021,” Credit Suisse added.
The executive council has also waived its bonuses for the 2020 financial year, the bank announced, and President Urs Rohner has resigned from his “chairman’s commission” of 1.5 million Swiss francs.
At its general meeting on April 30, Credit Suisse will propose a dividend of 0.10 gross Swiss francs per share along with the amended compensation report.
Last month, the bank announced a shake-up of its asset management business and a suspension of bonuses, as it appeared to contain the damage from the collapse of British supply chain financing firm Greensill Capital.
The Board has launched two separate, third-party investigations into the Greensill and Archegos sagas, promising “not only to focus on the direct issues arising from each, but also to reflect on the broader consequences and lessons learned. . “
Chin will be replaced as head of the investment bank on May 1 by Christian Meissner, current co-chair of Credit Suisse, an international investment adviser on wealth management and vice president of investment banking.
Joachim Oechslin has been named interim director of risk and Thomas Grotzer, interim global compliance chief as of Tuesday. All three will report to CEO Thomas Gottstein.
“The significant loss of our primary services business related to the failure of a U.S.-based hedge fund is unacceptable,” Gottstein said in a statement.
“In combination with recent questions about supply chain funding, I recognize that these cases have caused significant concern among all our stakeholders. Together with the Board of Directors, we are fully committed to addressing these issues. situations. Serious lessons will be learned. “
This is a developing story and will be updated soon.