The head of the investment bank at Credit Suisse Group AG, Brian Chin, is expected to come out as part of a broader change at the Zurich bank that was hit hard by the collapse of Archegos Capital Management.
Chin’s departure will be announced as early as Tuesday, according to people familiar with the matter who asked not to be named because the measures were not disclosed.
The bank’s leaders are also discussing the replacement of chief risk officer Lara Warner, while saving executive director Thomas Gottstein while calculating Archegos-related losses that could reach billions. Warner is ready to leave the company, the Financial Times reported.
Archegos, an American hedge fund that failed to pay margin calls, may be responsible for Credit Suisse’s losses that occur in the billion, according to people with knowledge of the subject. The company acknowledged that the losses will be significant and is expected to give investors an update this week. Reuters said the update will come on Tuesday. The company is also planning a review of its top-tier brokerage business.
Chin was promoted to CEO of the investment bank last year, when Gottstein merged the unit with commercial operations after the departure of former CEO Tidjane Thiam. The restructuring marked a victory for Chin, who helped turn the business from perennial underperformance during much of Thiam’s management to a major contributor to profits. In 2016, Chin was appointed chief executive of global markets and joined the bank’s executive board.
A bank representative declined to comment on Chin’s departure and other movements. Chin did not immediately respond to requests for comment. Credit Suisse representatives did not immediately respond to requests for comment on FT’s Warner report.
Read more: Credit Suisse ponders replacing the chief risk in an impending change of executives
Gottstein took over in February 2020, following a spy scandal that toppled his predecessor. He promised a clean sheet for 2021, but the company was instead overwhelmed by repeated oversight oversights, including major successes from the collapse of Greensill Capital and the Archegos turmoil.
The explosions left analysts wondering if Credit Suisse has a systemic risk management problem and investors face another quarter of losses. The bank’s repurchase program of 1.5 billion Swiss francs ($ 1.6 billion) runs the risk of being stopped for the second time – after it was stopped at the start of the pandemic last year – and losses can pressure the bank’s dividend distribution.
Also on Monday, Credit Suisse started to download shares linked to the Archegos explosion – more than a week after some rivals divested their shares and circumvented the losses.
The Swiss bank hit the market with block operations linked to ViacomCBS Inc., Vipshop Holdings Ltd. and Farfetch Ltd. that totaled more than $ 2 billion at current prices, said a person familiar with the matter. The shares are being traded substantially below where they were last month, before the implosion of Archegos, Bill Hwang’s family office.
The shares of the three companies fell in post-market trading, as did the USlisted actions Credit Suisse.
– With the help of Sridhar Natarajan, Ambereen Choudhury and Drew Singer
(FT updates, Reuters reports starting in the third paragraph.)