Archegos fiasco deals new blows to UBS, Nomura

Archegos fiasco deals new blows to UBS, Nomura

TOKYO: The collapse of US hedge fund Archegos dealt new blows to global banking giants yesterday as Japan's Nomura reported a bigger financial impact than expected and Switzerland's UBS disclosed a surprise hit. 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.

The debacle hit firms including Credit Suisse, Morgan Stanley and several leading Japanese banks for a total of at least $10 billion. Nomura had already estimated it faced losses of around $2 billion linked to its exposure. But yesterday the Japanese bank said the damage would be closer to $3 billion and that it would open an investigation.

In its earnings report, Nomura announced it had booked a loss of 245.7 billion yen ($2.3 billion) in the 2020-2021 fiscal year. In addition, the bank expects losses of around $570 million for the fiscal exercise ending March 2022. In Zurich, UBS said it had suffered losses of $774 million (640 million euros) related to Archegos in the first quarter, although it still reported increased profits.

That was far less than its Swiss rival Credit Suisse, which last week said it would