Credit Suisse Group AG’s prime-brokerage co-heads are leaving the bank in the wake of its $4.7 billion loss from the implosion of Archegos Capital Management, according to a company memo.
John Dabbs and Ryan Nelson will step down immediately while assisting Credit Suisse through mid-May on an orderly transition, the bank said in the memo. Roger Anerella was appointed interim head of prime services, while Doug Crofton was made head of Americas cash with responsibility for execution and advisory sales and Stuart McGuire put in a similar role for Europe, Middle East and Africa.
The Swiss lender took a 4.4 billion franc ($4.7 billion) writedown and has since parted ways with several top executives over its dealings with Archegos, weeks after the collapse of Greensill Capital. Dividends have been cut and share buybacks suspended. Analysts see further losses and potential fines. Credit Suisse’s market value has dropped by about 20% since it first raised issues with Archegos.
Credit Suisse is grappling with how much its leadership team knew and controlled client risks. It was sued by a small pension fund that alleges the bank misled investors and let “high-risk clients” including Greensill and Archegos take on too much leverage, in one of the first lawsuits since the twin
Credit Suisse emerged as the big loser in global investment banks’ race to exit trading positions as Archegos collapsed, pushing it into a 900 million-franc ($975 million) pretax loss for the first quarter. The bank, which is also dealing with the collapse of a group of supply chain finance funds, has already said that top management won’t get a bonus for last year.
In the aftermath of the Archegos loss, the bank said chief risk officer Lara Warner would leave the bank, as well as investment banking head Brian Chin. The head of equities sales and trading Paul Galietto, also stepped down, though will stay through April to assist in the transition, according to a staff memo earlier this month.
The lender also announced three additional exits. Ryan Atkinson, head of credit risk for the investment bank; Ilana Ash, head of counterparty credit risk management for that unit and Manish Mehta, head of counterparty hedge fund risk, according to the memo.