Two Credit Suisse top executives are stepping down as a result of the Archegos scandal. The Swiss bank is slashing its dividend for last year as it faces nearly $5 billion in wreckage.
The Zurich-based bank said both risk and compliance chief Lara Warner (pictured below; image from Harvard Kennedy School) and top investment banker Brian Chin will step down, effective immediately and month-end, respectively, Credit Suisse said in a statement on Tuesday. Their resignations are due to Archegos' unwinding and a supply chain fund debacle.
The exits of Warner and Chin (pictured below) are part of a raft of measures by Credit Suisse to counter the twin crises: it said in a separate statement it faces an up to 4.4 billion Swiss franc ($4.68 billion) hit from the implosion of Archegos, a family office which was a prime brokerage client. This will tip Credit Suisse to a first-quarter loss of 900 million francs before taxes.
Dumping Archegos Stakes
CEO Thomas Gottstein called the Archegos loss «unacceptable» and said Credit Suisse is fully committed to addressing both it and Greensill, which are being investigated by outside parties. «Serious lessons will be learned,» said Gottstein, who took the top job just 13 months ago.
The remarks come as the 165-year-old lender dumped $2.3 billion worth of stocks linked to Archegos in block trades, including ViacomCBS Inc., Vipshop Holdings Ltd., and Farfetch Ltd., according to «Bloomberg». At its investment bank, the outlet reported that besides Chin (pictured below), Credit Suisse sales and trading boss for equities, Paul Galietto, is stepping down, effective immediately.
Slashing Payouts
The Swiss bank will lower its dividend for last year to 0.10 francs per share – roughly one-third of what it originally promised – and eschew a vote asking for shareholder backing at its annual meeting. Both are highly unconventional measures which underscore the severity of its current crisis. Top executives face lower bonuses this year, and Chairman Urs Rohner, who is emblematic for Credit Suisse's missteps piling up, will waive part of his pay.
The bank's share price is 70 percent lower than in 2011, when Rohner took over. The Swiss lawyer, who has pulled down more than 34 million francs since then, hands the burgeoning problems as well as a crisis response committee to successor António Horta-Osório on April 30.
Dealmaker Advances
Credit Suisse is tapping a combination of current and former executives to replace Chin and Warner: the Swiss lender will install Christian Meissner atop the investment bank in place of Chin (pictured below). Credit Suisse hired Meissner, an Austrian dealmaker who formerly oversaw corporate and investment banking at Bank of America, last fall for its private bank.
It said Joachim Oechslin will stand in temporarily as risk boss after Warner exits. Oechslin, currently a senior Credit Suisse advisor as well as director at insurer Swiss Re, held the risk job until two years ago. Thomas Grotzer, the top lawyer at Credit Suisse's domestic unit, will take over the compliance side of Warner's job, effective immediately.
More to follow
