Switzerland-based investment bank Credit Suisse is reportedly considering reshuffling its corporate executives, including replacing its chief risk officer, Lara Warner.
Discussions to remove some of its top executives came after the bank was caught up in several high-profile issues that resulted in billions of dollars in losses. Sources briefed on the matter said that leaders at the bank have remained unconvinced of the executive team's recovery efforts.
The bank's chief executive officer, Thomas Gottstein, previously committed to creating a clean slate for the company after it was caught in the middle of a spying scandal among other miscues. Despite his efforts, Credit Suisse remains to be one of the worst-performing major bank stocks this year.
Last week, around $4.8 billion was wiped from the company's market capitalization. The bank's stock dropped by more than 14% last Monday after the bank announced that it may suffer a blow to its first-quarter earnings due to the liquidation of U.S.-based private wealth family office, Archegos.
The prolonged pandemic, the Archegos liquidation, and the recent collapse of U.K. lending company Greensill are all expected to weigh down the company's earnings prospects in the coming quarters. Credit Suisse was one of the main investors of the Softbank-backed chain lender before it filed for bankruptcy. An estimated $140 million in collateralized loan to Greensill is now in default.
Analysts expect the bank to report a loss of between $3 billion to $4 billion for its current quarter, which it is expected to report next month. The top end of the estimated loss would be almost triple its net income for the same period last year.
Sources said that the bank's leaders are planning to review its prime brokerage business, which is under its investment banking arm. This would likely place the job of Brian Chin, the chief executive of the bank's investment unit, under scrutiny, sources said.
Bloomberg said that the bank's exposure to the Luckin Coffee scandal among other miscues will add to its scrutiny on management, which will result in several people likely losing their positions. Sources said that Gottstein is expected to remain as CEO of the company.