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888 7th Ave, a building in NEw York that reportedly houses Bill Hwang’s Archegos Capital Management. Photo: Reuters

Credit Suisse unloads US$2.3 billion of stocks linked to Bill Hwang’s Archegos as bank chief departs in management shake-up

  • Swiss bank hits the market with block trades tied to ViacomCBS, Vipshop Holdings and Farfetch that totalled more than US$2 billion at current prices
  • Investment banking chief Chin is set to leave, with his exit to be announced as soon as Tuesday, according to people familiar
Credit Suisse unloaded about US$2.3 billion worth of stocks tied to the Archegos Capital Management blowup more than a week after some rivals dumped their shares and skirted losses.

The Swiss bank hit the market with block trades tied to ViacomCBS, Vipshop Holdings and Farfetch, a person with knowledge of the matter said. The stocks traded substantially below where they were last month before Bill Hwang’s family office imploded.

The offering on Monday was large, about 34 million shares in ViacomCBS, 14 million shares of Vipshop and 11 million shares of Farfetch, but this is still a fraction of the size traded by banks at the end of March. Shares in the three companies declined in post-market trading, as did US-listed shares of Credit Suisse.

The Zurich-based firm has yet to provide investors with an update on the extent of the hit it faces from its relationship with Archegos, but it could run into the billions of dollars, according to people with knowledge of the matter.

A Credit Suisse sign hangs outside its Manhattan offices on March 29 in New York City. Major global banks, including Credit Suisse, are being hit with billions of dollars in losses Archegos Capital defaulted on margin calls. Photo: AFP
Investment-bank chief Brian Chin is set to leave, with his exit announced by the Swiss lender as soon as Tuesday. Leaders are also discussing removing chief risk officer Lara Warner, while sparing Chief Executive Officer Thomas Gottstein. Warner would also replaced, Reuters reported separately.

Chin was promoted to chief executive officer of the investment bank last year when Gottstein merged the unit with trading operations after the departure of former CEO Tidjane Thiam. The restructuring marked a victory for Chin, who helped transform the business from a perennial underperformer during a large part of Thiam’s tenure to a key profit contributor.

A bank representative declined to comment on Chin’s departure and the other moves. Chin did not immediately respond to requests for comment.

Bill Hwang, CEO and founder of Archegos Capital Management and Fuller trustee. SCMP Pictures (Undated handout)

The unwinding of Bill Hwang’s Archegos portfolio has turned into one of the biggest fund flame-outs since Long-Term Capital Management’s demise in the 1990s.

Archegos had grown rapidly on the back of heavily leveraged bets. These came undone within days late last month as stocks including ViacomCBS and GSX Techedu tumbled, triggering margin calls.

Credit Suisse, Nomura Holdings, MUFG and Mizuho are among lenders facing big losses in the fiasco. Goldman Sachs and Morgan Stanley, which were among the first banks to liquidate Archegos’s holdings, appear to have avoided hits to their businesses.

Given Archegos’s size, banks may accrue total losses in the range of US$5 billion to US$10 billion as positions get unwound, JPMorgan Chase analysts led by Kian Abouhossein wrote in a note to clients last week.