Zurich, Switzerland—Credit Suisse announced Friday that one of its board members would step aside after shareholders called for his head following major losses linked to the collapses of the Archegos and Greensill financial firms.
The Swiss bank said in a brief statement that Andreas Gottschling, the head of the board’s risk committee, would not seek re-election at a general assembly later on Friday.
Credit Suisse has been hit hard by bankruptcies at Archegos, a US hedge fund, and British financial firm Greensill.
Shockwaves rippled through global financial markets and institutions last month when then little-known Archegos sold at least $20 billion in stocks as it sought to cover obligations to its lenders.
Losses at leading global banks have jumped past $10 billion, with Credit Suisse accounting for around half of the damage.
Credit Suisse had also invested heavily in Greensill, a firm specialized in short-term corporate loans via a complex and opaque business model, and was forced to suspend four funds after the firm declared insolvency last month.
One of Switzerland’s top shareholders associations, Actares, had opposed Gottschling’s re-election to the risk committee.
Actares called on Credit Suisse to change its corporate strategy and culture in the wake of the financial fiascos.
“The example of the Greensill case shows that Credit Suisse apparently hasn’t learned to manage complex risks for such an important client,” it said in a statement earlier this month.
The US firm Glass Lewis, which advises investors, had also urged Credit Suisse shareholders to vote against Gottschling’s re-election, saying a change would help restore investor confidence.
Credit Suisse reported a net loss of 252 million Swiss francs ($275 million, 229 million euros) in the first quarter and said it would issue new shares to reinforce its capital base.
The bank has said it would lose a total of 5.0 billion Swiss francs ($5.5 billion) to cover damage related to Archegos across the first and second quarters.
Swiss rival UBS was also hit, but not as badly as Credit Suisse, booking losses of $774 million related to Archegos.
Japan’s Nomura, meanwhile, said last week it faced losses of almost $3 billion.
US family-owned hedge fund Archegos, run by former Tiger Asia director Bill Hwang, had taken huge bets on a few stocks with money borrowed from banks.
When several of those bets turned sour, the fund was unable to meet “margin calls”—when the banks demand extra cash or assets to cover losses in a brokerage account.
Greensill’s Australian parent company, meanwhile, entered liquidation this month.
The company had filed for bankruptcy last month for its operations in Britain, and also in Australia where its parent group is based and in Germany where it has a banking arm.
Greensill’s implosion threatens about 50,000 jobs at companies that relied on its supply chain financing, including the steel empire of Indian-British billionaire Sanjeev Gupta.