Credit Suisse faces backlash from investors after the Archegos crisis took heavy losses
Credit Suisse is facing a major backlash from investors after the Archegos crisis has suffered heavy losses.
The banking giant was already reeling from the aftermath of an espionage scandal and ties to lender Greensill Capital.
Now, shareholder advisory group Ethos is advising investors to vote against all board and management compensation, after Credit Suisse said it would take a £ 2 billion to £ 3 billion hit due to Archegos’ collapse.
Shareholders will question the future of Credit Suisse chief risk officer Lara Warner (pictured), who has held senior positions at the bank’s Risk and Compliance offices since 2015.
Chairman Urs Rohner, a former attorney, would step down during the annual meeting in April and leave it to outgoing Lloyds boss Antonio Horta-Osorio.
But an investor uprising would be an embarrassing blow to the 61-year-old Swiss banker, who would end his ten-year tenure as chairman of Credit Suisse on a sour note.
Vincent Kaufmann, CEO of the Ethos Foundation, said, “These new cases are causing an incredible number of managerial failures during Mr. Rohner’s tenure.”
Harris Associates, one of Credit Suisse’s largest shareholders, has called on Rohner to pay for the events out of his own pocket.
David Herro, the investment firm’s chief investment officer, said, “Given recent events and past performance, I certainly think it would be appropriate for Mr. Rohner to forego any further compensation from Credit Suisse.”
Shareholders will also question the future of Credit Suisse chief risk officer Lara Warner, who has held senior positions at the bank’s risk and compliance offices since 2015.
The company’s checks and balances are being reviewed by outside advisers in the wake of the fall of Greensill and Archegos, as the bank was heavily exposed to both activities.
It had funds worth £ 7 billion that invested customers’ money in Greensill loans, and now the question arises as to whether those investments actually delivered what customers expected.
In addition, Credit Suisse lent Greensill £ 100 million – money it is unlikely to get back as Greensill is now out of business.
The Swiss bank has already abolished bonuses for some of the senior employees involved in the Greensill debacle and replaced the boss of its asset management unit.
Shares in Credit Suisse are down 16.5 percent so far this week, taking £ 4 billion from its market value.