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
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 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.
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.
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.
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.