Credit Suisse have confirmed this morning that the collapse of US hedgie Archegos Capital will cost them a cool £3.4bn.
A trading update sent to markets this morning said the CHF 4.4bn charge would send the bank to an expected pre-tax Q1 loss of around CHF 900m (£690m).
The bank blamed “the failure by a US-based hedge fund to meet its margin commitments” – referring to Archegos Capital.
Archegos imploded just under a fortnight ago leaving Credit Suisse in the unenviable position of liquiding billions of dollars worth of stocks.
UBS is also expected to be hit hard.
Credit Suisse’s Chief Risk Officer Lara Warner is leaving the business, it was reported yesterday. The firm’s investment bank chief Brian Chin is also expected to depart.
The firm has also become embroiled in the collapse of Greensill Capital.
Credit Suisse CEO Thomas Gottstein said this morning that: “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 amongst all our stakeholders.”
“Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history,” he continued.