Credit Suisse today announced a $4.7 billion loss from the forced liquidation of Archegos, a U.S. safe-haven fund. Credit Suisse also announced a dividend cut and the departure of two senior executives.
AFP reports that Credit Suisse and Japanese investment bank Nomura warned in March that their exposure to Archegos could suffer significant losses as the U.S. hedge fund Archegos Capital Management was forced to close out its holdings.
In a statement, Credit Suisse Chief Executive Thomas Gottstein said, “It is unacceptable that our Prime Services business has suffered significant losses due to the inability of a U.S.-based hedge fund to pay.”
Bloomberg News reported that the hedge fund Credit Suisse was referring to was the lesser-known Archegos, which sold more than $20 billion in shares of U.S. media companies and Chinese companies to meet margin calls.
Credit Suisse today announced a pre-tax loss of 900 million Swiss francs (NT$27.4 billion) for the first quarter of the year, including a loss of 4.4 billion Swiss francs (US$4.7 billion, NT$133.8 billion) related to the “inability of a U.S. hedge fund to meet its margin obligations”.
Credit Suisse also announced that the head of the investment banking business and the chief risk and compliance officer will be removed from his position, and that the bonuses of senior executives will be suspended and dividends will be reduced. Credit Suisse’s board of directors also announced that it will investigate the loss.
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