Finance

Credit Suisse loses more senior bankers as Archegos hit takes toll

Credit Suisse is continuing to lose senior bankers to competitors in the wake of missteps including a $5.5bn loss tied to the meltdown of Archegos Capital Management.

Several investment bankers in the US gave their notice in the past week, while others are considering leaving, people familiar with the matter said.

Bankers recently heading for the exits include Eric Federman, who was a co-head of the media and telecom team and is joining Barclays; Spyros Svoronos, who was a co-head of the global industrials team in the Americas specialising in chemicals and agricultural companies and is joining Lazard; Brian McCabe, who was head of global energy and is joining JPMorgan Chase; and Brad David, who works with private equity firms and is joining Evercore.

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The departures are the latest blows to the bank after Credit Suisse’s head of global mergers and acquisitions decamped for Morgan Stanley last month; well over 10 bankers in the US investment bank had already been poached by rivals.

And in another sign that the Archegos fiasco continues to cost the bank several months after the investment firm imploded, Credit Suisse has been battling to hold on to other key talent rivals have sought to poach—in many cases through hefty retention bonuses and other perks.

Wells Fargo had been exploring hiring significant portions of Credit Suisse’s technology- investment-banking and capital-markets teams — including global head of equity and debt capital markets David Hermer — as well as some M&A specialists, the people said. But talks fizzled a few weeks ago and some of the people say they are unlikely to restart.

Meanwhile, the head of the Credit Suisse team specializing in blank-check companies, Niron Stabinksy, was being courted by several firms including Jefferies but plans to stay, some of the people said.

READ Goldman Sachs CEO says he’s pleased with ‘prompt action’ in Archegos firesale

Riding a wave of activity in the acquisition vehicles, his team has brought in over $500m in fees for the bank so far this year, some of the people said, helping make Stabinsky, dubbed by some as “Mr Spac,” one the highest paid bankers at the firm. It couldn’t be learned what Credit Suisse offered to keep him.

Investments held by Archegos, a family investment vehicle for Bill Hwang, plummeted in late March, forcing Credit Suisse to sell large stock positions at losses. The Swiss bank was hit harder by the collapse than any of its rivals. The debacle, coming on the heels of the collapse of Greensill Capital, another client that cost the firm dearly, has overshadowed an otherwise strong run for the investment bank, especially within capital markets and advisory.

Credit Suisse has been scrambling to shore up its ranks with new hires. On Monday, it hired Goldman Sachs veteran Joanne Hannaford as chief technology and operations officer and also added her to its executive board.

At least two managing directors have recently joined the bank from elsewhere: Kyle Heroman, who specializes in financial institutions and Mario Orozco, who joined the group catering to the bank’s wealthiest clients, some of the people said. Following the exit of the head of global M&A, Greg Weinberger, Credit Suisse tapped veteran deal makers Steven Geller and Cathal Deasy as co-heads of the group.

READ Credit Suisse could seek UBS merger on the back of Archegos, Greensill scandals

The bank in April installed António Horta-Osório as chairman and Christian Meissner, a Bank of America and Goldman veteran, as head of the investment bank.

Credit Suisse has said it would scale back the prime-brokerage business that caters to funds like Archegos and Horta-Osório has signaled that riskier business areas could be jettisoned. He also said the bank will review its risk management, strategy and culture, with a focus on personal responsibility and accountability.

Write to Cara Lombardo at [email protected] and Maureen Farrell at [email protected]

This article was published by Dow Jones Newswires

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