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Provided by Dow Jones
By Margot Patrick UBS Group AG said it lost $774 million from the implosion last month of Archegos Capital Management, a bigger hit than analysts expected, deepening the damage caused by the fund. Switzerland s biggest bank by assets said it lost the money from closing out a U.S. fund s trades. It took $434 million off net profit in the quarter, which overall was up 14% at $1.82 billion because of a surge in investment banking revenue from strong stock markets. UBS said it has fully exited the fund s positions now and the additional losses in the second quarter are immaterial.
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By Emily Glazer, Maureen Farrell and Margot Patrick Credit Suisse Group AG amassed more than $20 billion of exposure to investments related to Archegos Capital Management, but the bank struggled to monitor them before the fund was forced to liquidate many of its large positions, according to people familiar with the matter. The U.S. family investment firm s bets on a collection of stocks swelled in the lead-up to its March collapse, but parts of the investment bank hadn t fully implemented systems to keep pace with Archegos s fast growth, the people said. Credit Suisse Chief Executive Thomas Gottstein, and Chief Risk Officer Lara Warner, who recently departed the bank, only became aware of the bank s exposure to Archegos in the days leading up to the forced liquidation of the fund, people familiar with the bank said. Neither Mr. Gottstein nor Ms. Warner had been aware of the fund as a major client before that, these peop
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By Margot Patrick Credit Suisse Group AG said it would issue new shares after losses from Archegos Capital Management wiped out a strong first quarter, highlighting the damage caused by the collapse of the investment firm. On Thursday, the bank said it placed notes that convert to stock in six months to counter damage to its capital position from the loss and new charges imposed by the Swiss financial regulator. The offering will be based on the bank s share price in the coming days and could raise close to $2 billion in fresh capital. It said it had only a small remaining exposure to Archegos as of Wednesday after selling 97% of its related positions, but lost another $655 million from them in the second quarter, adding to a $4.7 billion charge in the first quarter.
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