The head of the investment bank Credit Suisse Group AG, Brian Chin, is to leave as part of a larger shakeup to the Zurich creditor, who was hit hard by the collapse of Archegos Capital Management.
Chin’s departure will be announced as soon as Tuesday, according to people familiar with the matter who asked not to be identified, as the movements were not made public.
The bank’s leaders are also discussing replacing CEO Lara Warner while sparing CEO Thomas Gottstein as he calculates Archegos-related losses, which could reach billions. Warner is about to leave the company, the Financial Times reported.
Archegos, a U.S. hedge fund that went into default on a margin, could account for losses to Credit Suisse that go into billion, according to people with knowledge about this issue. The company acknowledged that the losses will be significant and will provide investors with an update this week. Reuters reported that the update will come on Tuesday. The firm is also planning a review of its core brokerage business.
Chin was promoted to the position of executive director of the investment bank last year, when Gottstein merged the unit with trading operations after the departure of former CEO Tidjane Thiam. The restructuring marked a victory for Chin, who helped transform the business from a perennial underperforming performance for much of Thiam’s term to a key contributor to profit. In 2016, Chin was he was appointed executive director of global markets and joined the bank’s executive board.
A bank official declined to comment on Chin’s departure and other moves. Chin did not immediately respond to requests for comment. Credit Suisse representatives did not immediately respond to calls for comment on FT’s Warner report.
Read more: Credit Suisse weighs in to replace chief risk officer in future executive shakeup
Gottstein took over in February 2020 following an espionage scandal that toppled his predecessor. He promised a clean list for 2021, but the company was instead overwhelmed by repeated surveillance gifts, including major hits from the collapse of the capital Greensill and the Archegos unrest.
The blasts left analysts wondering if Credit Suisse has a systemic problem in risk management and investors facing another quarter of the losses. The bank’s $ 1.5 billion ($ 1.6 billion) share repurchase program risks being disrupted for the second time – after it was first shut down at the start of the pandemic last year – and the losses could exerts pressure on the distribution of the bank’s dividends.
Also on Monday, Credit Suisse began unloading shares related to the Archegos explosion – more than a week after some rivals abandoned their shares and lost losses.
The Swiss bank entered the market with bulk transactions related to ViacomCBS Inc., Vipshop Holdings Ltd. and Farfetch Ltd., which totaled more than $ 2 billion at current prices, said a person familiar with the matter. The shares are trading substantially below where they were last month before the implosion of Archegos, Bill Hwang’s family office.
The shares of the three companies fell in post-market trading, as did the USlisted shares to Credit Suisse.
– With the assistance of Sridhar Natarajan, Ambereen Choudhury and Drew Singer
(Updates with FT, reports Reuters starting with the third paragraph.)