A Swiss flag flies over the sign of a Credit Suisse Bank in Bern, Switzerland
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The Swiss lender now expects a first-quarter loss before tax of about 900 million Swiss francs ($ 960.4 million), after incurring 4.4 billion Swiss francs as a result of the scandal.
“The huge loss in our Prime Services business related to the failure of the hedge fund in the United States is unacceptable,” Chief Executive Thomas Gutstein said in a commercial update.
The bank said investment bank chief executive Brian Chen and head of risk and compliance management Lara Warner would be stepping down with immediate effect.
Credit Suisse revealed last week that it was expecting huge losses in the aftermath US hedge fund Archegos Capital collapses. The bank was forced to divest a large amount of shares to cut ties with the troubled family office.
The bank announced Tuesday that the Executive Board has also waived its bonuses for fiscal year 2020, as Chairman Urs Rohner waived his “chair fee” of 1.5 million Swiss francs.
At its Ordinary General Assembly meeting on April 30th, Credit Suisse will now propose a dividend of 0.10 Swiss francs gross per share along with a revised compensation report.
“After the important hedge fund case in the United States in particular, the board is amending its proposal on dividend distribution and withdrawing its proposals on variable compensation compensation to the Executive Board,” the Swiss lender said in a trade update.
It has suspended the share buyback program and said it has no intention of resuming stock purchases until it restores target capital ratios and restores dividends.
Last month, the bank announced a change in its asset management business and suspension of bonuses as it appeared to contain the damage from the collapse of British supply chain finance company Greensel Capital.
The council has launched two separate investigations, to be conducted by third parties, into the Greensel and Archigus sagas, pledging to “not only focus on the immediate issues arising from each, but also reflect on the broader findings and lessons learned.”
Chen will be replaced at the head of the investment bank on May 1 by Christian Meissner, currently co-chair of Credit Suisse Investment Banking Advisors for International Wealth Management and Vice President of Investment Banking.
Joachim Oechslin has been appointed Interim Chief Risk Officer and Thomas Gruiser as Interim Head of Global Compliance from Tuesday. The three will report to CEO Guchstein.
“Coupled with recent issues with supply chain finance funds, I realize that these instances have caused great concern among all of our stakeholders. Together with the board of directors, we are fully committed to addressing these situations. Serious lessons will be learned,” Goetstein said in a statement.