IMAGE COPYRIGHT CREDIT SUISSECredit Suisse took drastic action on today, replacing two key executives and cutting bonuses amid the fallout from two major business relationships.
Its chief risk officer, Lara Warner and its investment banking chief, Brian Chin will both leave the bank in April.
Two businesses linked to the Swiss banking giant, Greensill Capital and hedge fund Archegos imploded in recent weeks with major losses.
Greensill was the key financial backer of Liberty Steel owner, GFG Alliance.
Greensill Capital, filed for insolvency earlier this month. There are concerns about the future of Liberty Steel which directly employs 3,000 people in the UK. An additional 2,000 people work for GFG Alliance in the UK.
IMAGE COPYRIGHT GETTY IMAGESCredit Suisse said it expects to make a $960m (£690m) loss for the first quarter. It had planned to ask shareholders to vote on both short and long-term bonus awards for executives, but it has now cancelled these proposals and it is cutting its proposed dividend payout to shareholders.
Archegos collapsed after bets it made on stocks unravelled. Shares in one of its holdings, US entertainment giant Viacom, starting falling, forcing it to sell them off in double-quick time.
Credit Suisse was one of the last to try to unload its shares in the company, selling then at just over $40 per share, compared with the $100 it was priced at earlier in March.
Credit Suisse’s chief executive, Thomas Gottstein, said in a statement: “The significant loss in our prime services business relating to the failure of a US-based hedge fund is unacceptable.
Credit Suisse said it had launched investigations into both of these matters. It said these would not only focus on the direct issues arising from each of them, but also on the broader consequences.
Mr Gottstein said: “Serious lessons will be learned.” The bank’s results will be published on April 22, 2021.
Source: bbc.com
