Credit Suisse has announced the departure of several senior staff members while confirming a $6.13 billion loss, reportedly linked to the collapse of family office Archegos Capital.
Credit Suisse said it expects to incur a pre-tax Q1 loss of $1.25 billion including a charge of $6.13 billion in respect to "the failure of a US-based hedge fund" which international media outlets are reporting to be Archegos Capital.
Archegos Capital defaulted on margin calls from several global investment banks, including Credit Suisse, on March 26.
"This will negate the very strong performance that had otherwise been achieved by our investment banking businesses and the increase in the year-on-year profits in all three of our wealth management businesses, as well as in asset management, with particular strength in our Asia Pacific division," Credit Suisse said.
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In announcing the hit, Credit Suisse also confirmed investment bank chief executive Brian Chin and chief risk and compliance officer Lara Warner stepped down. Warner's departure was immediate, while Chin will remain in his role until the end of the month.
Chin is to be replaced with Christian Meissner, currently Credit Suisse's co-head of international wealth management and investment banking advisory.
Former chief risk officer and current senior advisor and chief of staff to the chief executive of Credit Suisse Group Joachim Oechslin has been appointed interim chief risk officer.
Credit Suisse general counsel Thomas Grotzer has taken on the role of global head of compliance for the group on an interim basis, effective immediately.
At its annual general meeting on April 30 Credit Suisse will propose a revised dividend and amended compensation report, with the executive team having waived its bonuses for the 2020 financial year.
Credit Suisse has launched an investigation into the hedge fund matter and another into Greensill Capital. Both investigations are to be undertaken by third parties.
Archegos Capital was a family office run by Bill Hwang. Other investment giants reportedly caught up in the collapse are Nomura Holdings and Mitsubishi UFJ Financial Group. Deutsche Bank also had a relationship with the family office.