Credit Suisse the moment of truth has arrived. The Swiss giant pays the bill for the two biggest financial scandals of recent times. And the price is very high.
Fine Greensill, the British financial company that filed for bankruptcy last March 8, then Archegos, Bill Hwang's family office collapsed last week after placing billions of dollars in bets on some stocks thanks to leverage and loans granted by some banks. Two events that directly involve Credit Suisse which calculated a impact on its accounts equal to 4,4 billion of Swiss francs, about 4,7 billion euros. In the first quarter alone, the bank advanced a loss of 900 million of francs.
An account too high for it to remain without consequences. In fact, the bank has decided to “cut off two excellent heads”. Resigning from their posts will be Brian Chin, head of investment banking, and Lara Warner, chief risk officer for compliance matters. In their place will come, respectively, Christian Meissner and (ad interim) Joachim Oechslin.
In parallel, the CEO of Credit Suisse, Thomas Gottstein, has promised that he will draw "serious lessons" from what happened in the past weeks. "I recognize that these cases (Greensill and Archegos, ed.) have caused considerable concern among all our stakeholders," said Gottstein, whose seat appears to be far from stable.
Consequences are also coming for other executives. They will be cut manager bonuses, while the chairman of the board, Urs Rohner, will have to waive a fee of 1,5 million francs. Instead, they remain in standby the possible resignation of directors. In fact, the bank believes that "it is in the interests of shareholders to consider this proposal once the internal investigations into recent developments have been concluded and the results communicated", indicated Credit Suisse.
The repercussions of the Archegos and Greensill events will also affect shareholders. Credit Suisse has decided to reduce its dividend proposal ordinary shares at 0,10 Swiss francs gross per registered share, compared to the previous proposal of 0,29 francs in cash announced in February.
“Following the matter concerning the US-based hedge fund – reads the press release issued by the Swiss banking giant – the board of directors corrects its proposal on this aspect of its agenda, proposing to distribute reduced total ordinary dividends, equal to 0,10 .XNUMX Swiss francs on a gross basis for each registered share, half of the retained earnings and half of the capital contribution reserves”.
In Zurich, after today's announcements, the Credit Suisse stock resists the blow (-0,2%). In the last month, the shares have lost almost 22% of their value, falling to 10,15 francs.
