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Credit Suisse Group AG reported a loss of 4.4 billion Swiss francs ($4.7 billion) from its partnership with Archegos Capital Management LP on Tuesday, as well as the suspension of a share buyback program and a reduction in its proposed dividend.

The Swiss bank, which has sold more than $2 billion worth of stock to end its exposure to the distressed investor, also announced that Chief Risk Officer Lara Warner and the bank’s investment banking director, Brian Chin, will be stepping down.

Christian Meissner will take over as CEO of the investment bank on May 1, while Joachim Oechslin will serve as interim chief risk officer and Thomas Grotzer will serve as interim global head of enforcement, according to the statement.

“The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable,” Credit Suisse Chief Executive Thomas Gottstein said in a statement. “Serious lessons will be learned. Credit Suisse remains a formidable institution with a rich history.”

Warner and Chin are paying the price for a year in which Credit Suisse’s risk management protocols have come under fire, with two main business partnerships going sour in fast succession, saddling the bank with losses estimated to be worth $7.5 billion by JPMorgan Chase & Co analysts.

Late last month, Archegos, a private investment vehicle run by former hedge fund manager Sung Kook “Bill” Hwang, collapsed after its debt-laden bets on stocks of some media companies failed. Credit Suisse and other banks acting as Archegos’ brokers had to sell the shares they held as collateral and unwind the trades quickly.

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The Archegos debacle came just weeks after another main client, British finance company Greensill, went bankrupt. Greensill’s activities were funded by funds sold by Credit Suisse. In the aftermath of that company’s demise, Warner’s position has also been called into question.

“Obviously heads are rolling. After any sort of blow-up there’s always tighter control,” said Jason Teh, chief investment officer at Vertium Asset Management in Sydney.

Credit Suisse had lost a lot of money, and Teh predicted that its stock would fail to recover.

“In the short term, even if all that is declared, [the stock] is not going to go up because you still have to grow earnings. Basically, they’ve lost earnings and they won’t get it back until they find another way to get it.”

Credit Suisse’s stock has dropped by a fifth in the last month as investors evaluate the bank’s bottom line and reputation, casting a pall on an otherwise promising start to the year.

The events have also placed pressure on Gottstein, who has been attempting to shift Credit Suisse past a series of negative headlines that include a spy scandal that led to the ouster of predecessor Tidjane Thiam and a $450 million loss on a hedge fund investment.


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