A Swiss flag flies over a Credit Suisse sign in Bern, Switzerland
FABRICE COFFRINI | AFP | Getty Images
Credit Suisse announced several senior staff departures on Tuesday and proposed a dividend cut as it weighs heavily in the Archegos Capital saga.
“In particular following the significant issue of US hedge funds, the Board of Directors amends its proposal on dividend distribution and withdraws its proposals on variable compensation from the Executive Committee,” the Swiss creditor said in a trading update.
Investment bank CEO Brian Chin and chief risk and compliance officer Lara Warner will step down from their roles with immediate effect, the bank said.
Last week, Credit Suisse revealed that it expects large losses due to the collapse of the American hedge fund Archegos Capital. The bank was forced to give up a significant amount of shares to sever ties with the troubled family office and now expects a pre-tax loss in the first quarter of around 900 million Swiss francs (960.4 million). dollars).
“This includes a fee of CHF 4.4 billion for the failure of a US hedge fund to meet its margin commitments, as we announced on March 29, 2021,” Credit Suisse added.
The executive committee also waived bonuses for the financial year 2020, the bank announced, and chairman Urs Rohner dropped the “chairman’s fee” of 1.5 million Swiss francs.
At the April 30 GMS, Credit Suisse will now propose a dividend of 0.10 gross Swiss francs per share, together with the amended compensation ratio.
Last month, the bank announced a reduction in its asset management business and a suspension of bonuses, as it appeared to contain the damage caused by the collapse of the British supply chain financing company Greensill Capital.
The Council has launched two separate third-party investigations into the Greensill and Archegos saga, swearing that “it will not only focus on the direct issues arising from each of them, but also reflect on the wider consequences and lessons learned. learned. “
Chin will be replaced as head of the investment bank on May 1 by Christian Meissner, currently co-head of Credit Suisse for international wealth management investment consulting and vice president of investment banking.
Joachim Oechslin has been appointed interim head of the risk function, and Thomas Grotzer has been appointed interim global head of compliance since Tuesday. All three will report to CEO Thomas Gottstein.
“The significant loss in our primary services business related to the failure of a US-based hedge fund is unacceptable,” Gottstein said in a statement.
“Along with recent issues related to supply chain funding, I recognize that these cases have caused significant concern among all stakeholders. Together with the Governing Body, we are fully committed to addressing these situations. Lessons will be learned. serious. “
This is an evolving story and will be updated soon.