Nomura Holdings Inc. and Credit Suisse Group AG posted double-digit drops on Monday due to exposure to wrong-way bets by Archegos Capital Management, according to Bloomberg.
- Nomura shares tumbled by a record 16% in Tokyo. It said the estimated amount of its claim against an unnamed American client was about $2 billion. People familiar with the matter identified the client as Archegos.
- Credit Suisse shares sank 14%. The lender said the loss may be “highly significant and material” to first-quarter results, but still premature to quantify.
- The Swiss lender already faces considerable uncertainty due to the collapse of Lex Gressnsil’s trade finance empire and reputational damage over the past year following the scandal.
- Other lenders with exposure to Archegos are Deutsche Bank AG which has yet to incur losses, and Goldman Sachs which said losses from the fallout are likely to be immaterial.
- Archegos failed to meet margin calls last week. Details on Bill Hwang’s trades are unclear, but analysts estimate that assets had grown between $5 billion to $10 billion and total positions may be over $50 billion.