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Tuesday, August 3, 2021

Credit Suisse ousts top execs, slashes bonuses amid heavy losses from US hedge fund meltdown

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Credit Suisse ousts top execs, slashes bonuses amid heavy losses from US hedge fund meltdown

Swiss banking giant Credit Suisse said on Tuesday it expects a first-quarter pre-tax loss of around $ 960.4 million after taking a charge of $ 4.7 billion as a result of the US hedge fund Archegos Capital collapse.

“The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable,” said Thomas Gottstein, chief executive of Credit Suisse.

Investment banking CEO Brian Chin and the chief risk and compliance officer, Lara Warner, will step down from their roles with immediate effect, according to Credit Suisse.

It also said the executive board will forgo both short-term and long-term bonuses for the 2020 financial year, with Chairman Urs Rohner giving up his “chair fee” of 1.5 million Swiss francs ($ 1.6 million).
Also on rt.com Global banks bracing for losses amid US hedge fund collapse
Credit Suisse will be suspending its share buyback program and reducing its dividend, to be paid through a mix of capital and retained earnings. According to the bank, it won’t resume share purchases “before we have regained our target capital ratios and restored our dividend.”

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READ MORE: Credit Suisse faces criminal charges over money-laundering for cocaine cartel

Credit Suisse was one of several lenders that acted as prime broker to the New York-based billionaire Bill Hwang’s Archegos Capital Management. The sudden liquidation of the hedge fund last month ignited a fire sale of more than $ 20 billion in assets that has left some of the world’s biggest investment banks bearing billions of dollars of losses. Credit Suisse was one of the last to try to unload its shares in the company, selling at just over $ 40 per share, compared with the $ 100 they were priced at earlier in March.

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Credit Suisse ousts top execs, slashes bonuses amid heavy losses from US hedge fund meltdown
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