Credit Suisse Rearranges C-Suite Following Back-To-Back Catastrophes

Credit Suisse Group AG AG has announced a shake-up of its upper executive level following the consecutive disasters it absorbed from the collapse of the Archegos Capital Management hedge fund and the freezing of $10 billion in investment funds connected to Greensill Capital, a failed British-based supply chain finance firm.

A Change Of Players: The Swiss-headquartered lender said Brian Chin, CEO of its investment bank, will resign from the executive board on April 30 while Lara Warner, chief risk and compliance officer, is stepping down effective Tuesday. Both Chin and Warner are also leaving the bank.

Beginning May 1, Christian Meissner will replace Chin in the C-suite and on the executive board. Meissner was Credit Suisse’s co-head of IWM Investment Banking Advisory and vice chairman of investment banking since October 2020, and was previously the head of global corporate and investment banking at Bank of America Merrill Lynch.

Warner is being replaced in her job and on the executive board in an interim appointment of Joachim Oechslin, who previously held both positions from 2014 to 2019 before becoming senior advisor and chief of staff to the CEO of Credit Suisse Group.

Another interim appointment is Thomas Grotzer as global head of compliance. Grotzer was general counsel and a member of the executive board of Credit Suisse (Schweiz) AG since 2016.

Related Link: GameStop Retail Investors Take Archegos Fallout As Opportunity To Hit Back At Wall Street

Financial Woes: Credit Suisse also announced investigations would be conducted into the Credit Suisse Asset Management managed supply chain finance funds and the Archegos collapse, which cost the company $4.7 billion. The investigations will be conducted by external parties supervised by a special committee appointed by the board.

As a result of the back-to-back issues, Credit Suisse announced it will reduce its dividend and suspend planned share buybacks.

“The significant loss in our Prime Services business relating to the failure of a U.S.-based hedge fund is unacceptable,” Thomas Gottstein, CEO of Credit Suisse Group, said in a statement.

“In combination with the recent issues around the supply chain finance funds, I recognize that these cases have caused significant concern amongst all our stakeholders. Together with the board of directors, we are fully committed to addressing these situations.

“Serious lessons will be learned,” Gottstein said. “Credit Suisse remains a formidable institution with a rich history.”

Late Monday, Bloomberg cited an anonymous source in reporting Credit Suisse Group AG sold roughly $2.3 billion in stocks tied to the Archegos debacle. The bank offered block trades tied to ViacomCBS Inc. VIAC, Vipshop Holdings Ltd. VIP and Farfetch Ltd. FTCH.

Credit Suisse is scheduled to release its first-quarter 2021 earnings report April 22.

CS Price Action: Credit Suisse's U.S.-listed shares were down 0.28% premarket at $10.84. 

Related Link: BofA Cuts Credit Suisse Price Target For Second Time In 3 Days

Credit Suisse headquarters in Zurich. Photo by Thomas Wolf/ Wikimedia Commons.

Posted In: Archegos Capital Managementbanksbig banksGreensill CapitalNewsDividendsBuybacksManagement