Credit Suisse Executives to Depart After Losses From Archegos

(Bloomberg) -- Credit Suisse Group AG is shaking up its executive ranks after the Zurich-based lender was hard-hit by the collapse of Archegos Capital Management.

Investment bank chief Brian Chin is set to leave in an exit that may be announced as soon as Tuesday, according to people familiar with the matter, who asked not to be identified because the move hasn’t been made public.

The bank’s leaders are also discussing replacing Chief Risk Officer Lara Warner while sparing Chief Executive Officer Thomas Gottstein as they tally Archegos-related losses. Warner is set to leave the firm, Financial Times reported.

Archegos, a U.S. hedge fund that defaulted on margin calls, could account for losses at Credit Suisse that run into the billions, people with knowledge of the matter said. The firm has acknowledged the losses will be significant, and is set to give investors an update this week. The firm is also planning a review of its prime-brokerage business.

Paul Galietto, head of equities sales and trading, is stepping down from that role effective immediately, though he will stay through April to assist in the transition, the bank said in a staff memo reviewed by Bloomberg. Anthony Abenante will replace Galietto on an interim basis while continuing in his current role as global head of execution services.

Chin was promoted to chief executive officer of the investment bank last year when Gottstein merged the unit with trading operations after the departure of former CEO Tidjane Thiam. The restructuring marked a victory for Chin, who helped transform the business from a perennial under-performer during a large part of Thiam’s tenure to a key profit contributor. In 2016, Chin was named chief executive of global markets and joined the bank’s executive board.

A bank representative declined to comment on Chin’s departure and the other moves. Chin didn’t immediately respond to requests for comment. Credit Suisse representatives didn’t immediately respond to calls for comment on the FT’s Warner report.

Read more: Credit Suisse Weighs Replacing Risk Chief in Looming Executive Shakeup

Gottstein took over in February 2020 in the wake of a spying scandal that took down his predecessor. He pledged a clean slate for 2021, but the firm has instead been overwhelmed by repeated lapses in oversight, including major hits from the collapse of Greensill Capital and the Archegos turmoil.

The blow-ups have left analysts asking whether Credit Suisse has a systemic problem in risk management, and investors facing another quarter of losses. The bank’s 1.5 billion Swiss franc ($1.6 billion) share buyback program is at risk of being paused for the second time -- after first being stopped at the onset of the pandemic last year -- and losses could put pressure on the bank’s dividend distribution.

Also Monday, Credit Suisse started unloading stocks tied to the Archegos blowup -- more than a week after some rivals dumped their shares and skirted losses.

The Swiss bank hit the market with block trades tied to ViacomCBS Inc., Vipshop Holdings Ltd. and Farfetch Ltd. that totaled more than $2 billion at current prices, a person with knowledge of the matter said. The stocks are trading substantially below where they were last month before the implosion of Archegos, Bill Hwang’s family office.

Shares in the three companies declined in post-market trading, as did U.S.-listed shares of Credit Suisse.

©2021 Bloomberg L.P.