Sprung a leak

6 April 2021 By Liam Proud Follow @liamwardproud

Risk chief Lara Warner and investment bank boss Brian Chin are leaving after the Swiss bank unveiled a $4.7 bln hit from Archegos’ collapse. New board investigations should include deeper soul-searching over recent scandals. Restructuring and business disposals may be necessary.

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Credit Suisse on April 6 said Chief Risk and Compliance Officer Lara Warner and Brian Chin, the Swiss bank’s head of investment banking, were stepping down. Their departures follow the collapse of Greensill Capital, which sourced assets for some of the bank’s asset management funds, and Archegos Capital Management, a hedge fund that failed to meet margin calls.

The bank will take a 4.4 billion Swiss franc charge from the Archegos failure, pushing it to a pre-tax loss of 900 million Swiss francs in the first quarter of 2021. Credit Suisse expects its common equity Tier 1 capital ratio to remain above 12%, but is cutting a proposed dividend payment by two-thirds and suspending share buybacks.

Christian Meissner, a former investment banking executive at Bank of America Merrill Lynch who joined Credit Suisse in October, will replace Chin. Warner’s interim replacement as head of risk will be Joachim Oechslin, who previously held the same role at insurer Munich Re. Thomas Grotzer, currently general counsel for the bank’s Swiss subsidiary, will take over as interim head of compliance.

The board has launched investigations into both the Archegos and Greensill situations, with a view to considering the “broader consequences and lessons learned”. Credit Suisse’s top executives will not receive bonuses for the 2020 financial year and outgoing Chairman Urs Rohner has waived a 1.5 million Swiss franc “chair fee”.

Credit Suisse shares were flat at 10.15 Swiss francs at 0739 GMT on April 6.

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Credit Suisse shares were flat at 10.15 Swiss francs at 0739 GMT on April 6.

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