According to people with knowledge of the relationship, Credit Suisse earned only SFR 16m from Archego Capital last year, which caused a ধ 5.4 billion loss to Swiss bank as a result of a sudden collapse in the family office in March.
Poultry Fee Credit Suisse from Archergos, yr Persuasion One of the most destructive in recent history, the ultra-donor raises further questions about the risk it took to prepare for the relationship with extremely wealthy clients.
Arhegos, which was managed by a former hedge fund manager Bill Hawang, Borrowed tens of billions of dollars from at least nine global banks to estimate volatile stocks. Lenders collectively lost More than bn 10bn As a result
Despite raising billions of dollars in credit to Archegos, Credit Suisse made just 17.5 million from the relationship last year. According to two people with knowledge of the process, low levels of fees and high risk have caused concern among exposure boards and senior executives who are investigating the system.
Of particular concern to the bank’s management was the statement that Hawang was not a private banking client of the group, saying there was little incentive to do its main brokerage business, people said.
Credit Suisse claimed only a 10 percent margin for equity swaps with Arkigos and allowed the family office to make 10 times the profit on some transactions, according to people familiar with the trades. Report Risk Net.com. It was twice the leverage offered by co-prime broker Goldman Sachs Minimal damage When its locations unwind.
On Friday, Antonio Horta-Osario was confirmed as president of Credit Suisse and made a promise. Emergency review Bank risk management, strategy and culture.
“The current and potential risks of Credit Suisse should be the subject of immediate and close scrutiny,” said the former chief executive of Lloyds Banking Group. “I firmly believe that any banker should be a risk manager.”
The board of Credit Suisse was already there Removal Several senior executives, including Chief Risk and Compliance Officer Lara Warner and Investment Bank chief Brian Chin. The head of the board’s risk committee was Andres Gottschling Forced to resign In anticipation of a shareholder response last week.
Thomas Gottstein, the bank’s chief executive, has announced that it will cut one-third of its exposure to its core services business, the specialist unit that serves clients of hedge funds and was at the center of the Archigus crisis. There are also two heads of the Prime Department Resignation.
Credit Suisse does not disclose how much it earns from its prime services division, but JPMorgan analyst Kean Abuhossain estimates that the unit earned 900 900 million last year, more than a third of its total equity business.
Abu Hussein said the main brokerage investment bank has made more profits than other parts of the bank. “We see Credit Suisse taking action as a crisis for the overall long-term reality of the investment bank,” he added.
Although Credit Suisse is the largest European prime service provider, it has overtaken world leaders Goldman Sachs, Morgan Stanley and JP Morgan.
According to data investor Collision Greenwich, as hedge funds cut their orron borrowing during the epidemic, the largest investment banks brought in বছরের 15.2 billion a year in prime broking earnings last year, slightly less than the ব্যাংক 16.5 billion in European banks in 2019. There was less than a third.
Credit Suisse declined to comment.