Credit Suisse on Thursday reported a net loss of 252 million Swiss Francs($275 million) for the first quarter at a time of increased pressure on the bank. Shares of the bank fell about 5% at the market open on Thursday. It said the loss reflected a “significant charge with respect to the US-based hedge fund matter in 1Q21 (first quarter), offsetting positive performance across wealth management and investment banking.”
Moreover, the bank’s CEO Brian Chin and Chief Risk and Compliance Officer, Lara Warner both stepped down. The company didn’t expect such a drastic turn of the tables and is facing an unintended decision. The executive chair decided to waive bonuses for the year 2020.”The loss we had in Archegos was unacceptable and we had to take actions in terms of management changes. We are reducing our exposure in this business, we are reviewing our risk, controls and systems in that area,”Chief Executive Thomas Gottstein added.
He further stated that if barring the Archegos Hedge Fund Scandal, it was one of the best quarters in the history of Credit Suisse. The argument that pops up is whether the comment was to keep the positivity or just to indicate a strong position in the market when the company has been hit with enormous losses. He also went on saying that this is the best quarter in the last 10 years.