Credit Suisse Group AG is planning to slash lending to hedge funds by a third after the Archegos Capital blowup cost the bank $5.5 billion and forced it to tap investors for additional capital.
The Swiss lender on Thursday said it’s conducting a review with a goal of “resizing and derisking prime brokerage and prime financing businesses,” confirming a Bloomberg News report two weeks ago. It plans to focus the business on clients that have relationships with other parts of the firm and will reduce lending to hedge funds by some $35 billion, Chief Financial Officer David Mathers said in an interview.
