Credit Suisse CEO says 'serious lessons will be learnt' as firm takes $4.7b hit

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SME Times News Bureau | 07 Apr, 2021
Credit Suisse CEO Thomas Gottstein has said that "serious lessons will be leart" as the global bank took a $4.7 billion hit and fired two top executives after the collapse of the hedge fund, Archegos.

Gottstein said: "The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable. In combination with the recent issues around the supply chain finance funds, I recognise that these cases have caused significant concern among all our stakeholders. Together with the Board of Directors, we are fully committed to addressing these situations. Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history."

Credit Suisse has also announced an investigation into the matter.

"We acknowledge that both the US hedge fund and the supply chain finance fund matters require substantial further review and scrutiny. The Board of Directors has launched investigations into both of these matters which will not only focus on the direct issues arising from each of them, but also reflect on the broader consequences and lessons learned," a statement said.

Credit Suisse has also undertaken senior management changes within the Investment Bank division and within the Risk and Compliance organisation.

It has also slashed dividends and bonuses. Credit Suisse said that following the significant US-based hedge fund matter, the Board of Directors is amending its proposal on the distribution of dividends and withdrawing its proposals on variable compensation of the Executive Board.

Brian Chin, CEO of the Investment Bank, and Lara Warner, Chief Risk and Compliance Officer, will step down from their roles, the bank said.

The Credit Suisse losses are related to transactions with Archegos, a private investment vehicle of former hedge fund manager Bill Hwang which collapsed last month.