Brian Chin, the chief of the investment bank of Credit Suisse Group AG, will leave as part of a wider shake-up at the Zurich-based lender badly affected by the collapse of Archegos Capital Management.
Chin’s departure will be announced Tuesday, according to people familiar with the case who have asked not to be identified because the moves have not been made public.
The bank’s leaders are also discussing the replacement of Chief Risk Officer Lara Warner, while sparing Chief Executive Officer Thomas Gottstein while counting Archegos-related losses that could run into the billions. Warner will be leaving the company, Financial Times reported.
Archegos, a US hedge fund that defaulted on margin calls, could allow Credit Suisse to account for losses in the billions, according to knowledgeable people. The company has acknowledged that the losses will be significant and will provide investors with an update this week. Reuters reported that the update will come on Tuesday. The company is also planning a review of its prime brokerage business.
Chin was promoted to CEO of the investment bank last year by then Gottstein the unit merged with trading activities after the departure of former CEO Tidjane Thiam. The restructuring was a victory for Chin, who helped transform the company from a perpetually underperformer for much of Thiam’s tenure to a major profit contributor. In 2016, Chin appointed chief executive of global markets and joined the bank’s board of directors.
A bank representative declined to comment on Chin’s departure and the other movements. Chin did not immediately respond to requests for comment. Credit Suisse representatives did not immediately respond to calls for comment on the FT’s Warner report.
Read more: Credit Suisse weighs up Risk Chief’s replacement in the impending executive turmoil
Gottstein took over in February 2020 after an espionage scandal that toppled his predecessor. He promised a clean slate for 2021, but the company was instead overwhelmed by repeated review shortcomings, including major hits from the Greensill Capital collapse and the unrest in Archegos.
The eruptions left analysts wondering if Credit Suisse has a systemic problem in terms of risk management, and investors are facing another quarter of the losses. The bank’s 1.5 billion Swiss francs ($ 1.6 billion) share buyback program is in danger of being interrupted for a second time – after it first stopped at the start of the pandemic last year – and losses would drive the dividend payment of put the bank under pressure.
On Monday, Credit Suisse also began unloading stocks related to the Archegos eruption – more than a week after some rivals ditched their stocks and sidestepped the losses.
The Swiss bank entered the market with block trades linked to ViacomCBS Inc., Vipshop Holdings Ltd. and Farfetch Ltd. that totaled more than $ 2 billion at current prices, said a person with knowledge of the matter. Shares are trading significantly lower than last month before the implosion of Archegos, Bill Hwang’s family office.
The shares of the three companies fell during the post-marketing trade, as welllisted shares from Credit Suisse.
– Assisted by Sridhar Natarajan, Ambereen Choudhury and Drew Singer
Updates with FT, Reuters reports from the third paragraph.