Credit Suisse to Take $4.7 Billion Hit from Archegos Issue
Credit Suisse announced it will take a $4.7 billion hit from issues with Archegos Capital Management, causing management overhaul.
One of Switzerland's largest banks expected to post a Q1 loss of 900 million Swiss francs, cut its dividend by 2/3 and suspend its buyback plans. It has by now dumped over $2 billion worth of stock to end exposure to Archegos, said Chief Risk Officer Lara Warner and Brian Chin, the bank's investment banking head, who are stepping down following the losses.
The Archegos case becomes the second major scandal for Credit Suisse in the past months after the collapse of Greensill Capital. The bank's shares are already down by a quarter since March 1.
"The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable. Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history”, Credit Suisse Chief Executive - Thomas Gottstein commented.
Following the unsettling news, Credit Suisse shares were already seen down 1.5% in early trade.
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