Credit Suisse faces investor backlash after Archegos crisis leaves it nursing heavy losses
Credit Suisse is facing a major investor backlash after the Archegos crisis left it nursing heavy losses.
The banking giant was already reeling from the aftermath of a spying scandal and its ties to bust lender Greensill Capital.
Now shareholder advisory group Ethos is recommending investors vote against the entire board, and its executive pay, after Credit Suisse said it would take a hit of £2billion to £3billion due to the Archegos meltdown.
Shareholders will be questioning the future of Credit Suisse chief risk officer Lara Warner (pictured), who has held senior positions in the bank’s risk and compliance offices since 2015
Chairman Urs Rohner, a former lawyer, was already due to step down at the annual meeting in April and hand over to departing Lloyds boss Antonio Horta-Osorio.
But an investor revolt would be an embarrassing blow for the 61-year-old Swiss banker, ending his decade-long tenure as Credit Suisse’s chairman on a sour note.
Ethos Foundation chief executive Vincent Kaufmann said: ‘These new cases add up to an incredible number of governance failures during Mr Rohner’s tenure.’
Harris Associates, one of Credit Suisse’s largest shareholders, has called for Rohner to pay for the events out of his own pocket.
The investment firm’s chief investment officer David Herro said: ‘Given recent events and past performance, I certainly think it would be appropriate for Mr Rohner to forgo any further compensation from Credit Suisse.’
Shareholders will also be questioning the future of Credit Suisse chief risk officer Lara Warner, who has held senior positions in the bank’s risk and compliance offices since 2015.
The firm’s checks and balances are being reviewed by external advisers in the wake of the Greensill and Archegos downfalls, as the bank was heavily exposed to both businesses.
It ran funds worth £7billion which invested clients’ money in Greensill loans, and questions are now emerging over whether those investments contained quite what clients were expecting.
On top of that, Credit Suisse lent Greensill £100million – money which it is unlikely to recover, since Greensill is now bust.
The Swiss bank has already axed bonuses for some senior employees involved in the Greensill debacle, and replaced the boss of its asset management unit.
Shares in Credit Suisse have tumbled by 16.5 per cent so far this week, wiping £4billion off its market value.