This post originally appeared on Stock Market News
© Reuters. FILE PHOTO: Logo of Swiss bank Credit Suisse is seen in Zurich
ZURICH (Reuters) – Credit Suisse (SIX:)’s incoming Chairman Antonio Horta-Osorio intends to take a look at the bank’s risk management and culture following recent crises, as well as reviewing strategic options for the bank, he told shareholders upon his election on Friday.
Shareholders elected the former Lloyds (LON:) CEO with 96.45% approval during a time at which the bank has been roiled by billions in losses.
“It takes years to build a reputation while it can be seriously affected literally overnight,” he told shareholders in a webcast speech. “Over three and a half decades, I have personally worked at and led several banks in different countries and have lived through many crises. What has happened with Credit Suisse over the last eight weeks, with the US-based hedge fund and the supply chain finance funds matters, certainly goes beyond that.”
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).
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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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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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