Credit Suisse Group AG’s chief investment officer Brian Chin is leaving as part of a major turmoil at the Zurich-based credit provider, which was hit hard by the collapse of Archegos Capital Management.
According to people familiar with the matter, Chin’s resignation will be announced as early as Tuesday, as they have asked not to be identified because the moves were not made public.
The bank’s leaders are also discussing the replacement of chief risk officer Lara Warner, while chief executive Thomas Gottstein is being spared because they are saving Archegos-related losses that could run into billions. Warner is set to leave the firm, reports the Financial Times.
Archegos, a US hedge fund that failed to return margins, could be responsible for the losses of Credit Suisse this year billions, according to people with knowledge of the matter. The firm has acknowledged that the losses will be significant, and will give investors an update this week. Reuters reports the update will take place on Tuesday. The firm is also planning a review of its prime brokerage business.
Chin was promoted to chief investment officer last year when Gottstein merged the unit with trading operations following the departure of former CEO Tidjane Thiam. The restructuring was a victory for Chin, which helped transform the business from a perennial underperformer during much of Thiam’s term to a major profit contributor. In 2016, Chin was appointed world market chief executive and joined the bank’s executive board.
A bank representative declined to comment on Chin’s departure and the other moves. Chin did not immediately respond to a request for comment. Credit Suisse representatives did not immediately respond to calls for comment on the FT Warner report.
Read more: Credit Suisse weighs replacement of risk manager in looming executive turmoil
Gottstein took over in February 2020 in the wake of an espionage scandal that killed his predecessor. He promised a clean slate for 2021, but the firm was overwhelmed by repeated oversight, including big hits from the collapse of Greensill Capital and the unrest in Archegos.
The blasts have prompted analysts to ask whether Credit Suisse has a systemic problem in risk management, and that investors are still facing a quarter of the losses. The bank’s 1.5 billion Swiss franc ($ 1.6 billion) purchase program is in danger of being disrupted for the second time – after it was only halted last year with the start of the pandemic – and losses could put pressure on the bank’s dividend distribution instead.
Credit Suisse also began downloading shares on Monday linked to the inflation of Archegos – more than a week after some competitors dumped their shares and reduced losses.
The person with knowledge of the case said the Swiss bank hit the market with block trading related to ViacomCBS Inc., Vipshop Holdings Ltd. and Farfetch Ltd., which amounted to more than $ 2 billion. The shares traded significantly lower than last month before the explosion of Archegos, Bill Hwang’s family office.
Shares in the three companies declined in trading to the market, as did USlisted shares of Credit Suisse.
– With the help of Sridhar Natarajan, Ambereen Choudhury and Drew Singer
(Reuters reports that the updates begin with FT in the third paragraph.)