Credit Suisse foresees USD4.7B charge over hedge fund default

GENEVA (AP) — Swiss bank Credit Suisse yesterday announced the departure of two top executives and said it expects a one-time charge of USD4.7 billion in connection with a previously announced default of a United States (US) hedge fund on margin calls.

The Zurich-based bank said it provisionally expects to report a loss of 900 million francs for the first quarter — though final figures are still being worked out. Credit Suisse said it has suspended a share buyback programme and reduced its dividend in the wake of the default. “The significant loss in our prime services business relating to the failure of a US-based hedge fund is unacceptable,” CEO Thomas Gottstein said. “Serious lessons will be learned.”

The bank said it has launched two investigations “to be carried out by external parties”, and said Head of Credit Suisse’s investment bank Brian Chin and Chief Compliance and Risk officer Lara Warner will leave the bank.

Stack of money coin with trading graph. financial investment concept use for background.