Eric Varvel, the Credit Suisse executive who previously ran the bank’s $500bn asset management unit with ties to Greensill, is stepping down after three decades at the Swiss group.
Varvel, who was most recently chair of Credit Suisse’s investment bank and head of its US holding company, had contemplated leaving the bank partly due to a disagreement with the bank’s new chair, Antonio Horta-Osorio, sources told the Financial Times last week.
Now, in an internal memo from the bank’s CEO Thomas Gottstein seen by City AM and confirmed by a spokesperson, Varvel’s departure has been announced, and his successor James Walker has been appointed as interim CEO of the US holding company.
Varvel had previously headed up the bank’s asset management division, which sold investments linked to Greensill, the supply chain finance firm that collapsed into administration earlier this year, amid allegations of fraud and a lobbying scandal involving ex-prime minister David Cameron.
The $500bn unit had to suspend $10bn worth of investments in March that were linked to Softbank-backed Greensill, having sold them to investors on the premise that the firm’s popular supply chain finance funds were among the lowest risk investments Credit Suisse offered.
Investors were led to believe that the loans they held were fully insured against losses and backed by invoices that were usually paid in a few weeks.
But as the funds swelled to $10bn, a substantial amount of the money was then lent through Greensill and against invoices for future sales had not taken place but were just predicted.
Although the Swiss lender has collected $7.1bn of the fund’s assets so far, it has previously estimated that around $2.3bn remains at risk.
Varvel was ousted as head of the scandal beset asset management unit shortly after Greensill went bust.
Shortly after, Horta-Osorio joined Credit Suisse from Lloyds in April.
“I speak for us all when I say we appreciated Eric’s optimism, his leadership and his winning attitude,” Gottstein wrote in the memo.
“He has developed remarkably durable and deep relationships with colleagues and clients alike. Based on a great many conversations with Eric, I know the difference he made for this institution, its people and our clients over the years.”
After months of planning a structural review, last month Horta-Osorio revealed sweeping plans to restructure the beleaguered lender, reining in its investment bank and focusing on its wealth management division.
The new bank chair said the new strategy had been designed to to “rebuild a culture of trust”, as he pulled back from the prime broking unit that slid into a $5.4bn loss from the collapse of US family office Archegos Capital in March.
No reason for Varvel’s departure was given in the memo.