The Zurich-based lender is reportedly shaking up its senior management as it counts its losses from the Archegos and Greensill scandals.
Credit Suisse risk boss Lara Warner and investment banking boss Brian Chin are reportedly leaving the bank following the Archegos Capital and Greensill Capital debacles, «The Financial Times» reported on Monday night.
A «Bloomberg» report said several other business heads will also be leaving the bank, though chief executive Thomas Gottstein will be spared. They include Paul Galietto, head of equities sales and trading; Parshu Shah, head of prime services risk; Ryan Atkinson, head of credit risk for the investment bank; Ilana Ash, head of counterparty credit risk management for the investment bank; and Manish Mehta, head of counterparty hedge fund risk.
More Responsibility
Just last summer, Credit Suisse gave Warner and Chin more responsibility as part of its efforts to reduce costs and increase efficiencies.
As Credit Suisse's top risk manager, Warner, who has been with Credit Suisse or CSFB since 2002, had oversight of every type of risk, from cybersecurity, credit defaults, the bank's reputation, anti-money laundering, and climate risks. She was also given responsibility for compliance, i.e. for lawful corporate governance.
Chin (pictured above) became head of the entire CS investment bank, having previously only been responsible for the Global Markets division. At the time, Gottstein stated that the restructuring would make the bank more resilient.
Wide-Ranging Losses
Credit Suisse is likely to make an announcement on Tuesday, «Bloomberg» said, citing people familiar with the matter. Concrete information can also be expected on Tuesday regarding the total loss to Credit Suisse. The damage is expected to wipe out its profits this year and may necessitate a cap hike.
As finews.asia previously reported, supply chain financier Greensill is expected to have a default of up to $3 billion, while Archegos will likely have a loss of around $4 billion. In comparison, CS achieved a profit of 2.7 billion francs (almost $3 billion) in 2020.
Warner said recently she ultimately approved the $160 million bridge loan to Greensill, but didn't know until February that the bank's Greensill funds were about to lose their insurance coverage.
From One Crisis to Another
All in all, CS stumbled from one crisis to another. The bank was a victim of the scams involving the Chinese coffee house chain Luckin Coffee and the German payment provider Wirecard.
It also had to report approximately $680 million in damage from a scandal over mortgage-backed securities in the U.S. and was apparently involved in cocaine smuggling deals with the Bulgarian mafia. Last but not least, earlier this year it had to write off around $450 million in investments in the York Capital hedge fund.
