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Credit Suisse is overhauling its asset management business as it faces regulatory investigations into its dealings with Greensill Capital, warning on Thursday that its results and client confidence could be hit by the finance firm’s collapse.

Switzerland’s second-biggest bank and its asset management arm are reeling from the implosion of around $10 billion of funds related to British supply chain financier Greensill, heaping pressure on CEO Thomas Gottstein.

Credit Suisse said in its annual report that Swiss regulator FINMA was looking into the matter and reviewing its impact in relation to the bank’s so-called Pillar 2 buffer, which is capital banks hold against risks.

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“We can confirm that we have also imposed a Pillar 2 buffer in this context as stated by the bank in its annual report,” FINMA said, adding it was in contact with other authorities.

Credit Suisse stuck to its guidance on capital and said plans to buy back at least 1 billion Swiss francs ($1.1 billion) worth of stock this year were still on.

The bank named Ulrich Koerner as its new head of asset management and said it would separate the business into its own division from April 1. It has been part of the international wealth division run by Philipp Wehle.

Credit Suisse’s annual report said some unidentified fund investors had threatened litigation over the Greensill affair and the ultimate cost may be “material” to operating results.

“The portfolio manager has been informed that certain of the notes underlying the funds will not be repaid when they fall due,” it added.

“We might also suffer reputational harm associated with these matters that might cause client departures or loss of assets under management,” it said.

SHARES GAIN

Vontobel analyst Andreas Venditti said the bank’s emphasis of the asset management division’s “strategic importance” meant a sale of that business was unlikely.

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The new structure bucks a trend for blending Credit Suisse products and services in a seamless offering to its wealthy clients. It could, however, help address suggestions that the model lent itself to internal conflicts of interest.

Credit Suisse shares gained 2.5%.

Koerner will return to Credit Suisse from arch-rival UBS , where he most recently served as adviser to the CEO from 2019 to 2020. He ran UBS Asset Management from 2014 to 2019. Koerner was previously a senior executive at Credit Suisse Financial Services and ran the Swiss business.

Current asset management head Eric Varvel, who is also chairman of Credit Suisse’s investment bank and head of its U.S. holding company, will focus on his other roles.

Three senior asset management employees who helped oversee the Greensill funds have temporarily stepped aside.

The annual report showed the bonuses for a number of senior employees involved, “up to and including Executive Board members”, had been suspended.

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Asset Management lost 39 million Swiss francs ($42-million) before taxes last year after a hefty writedown on an investment in a U.S. hedge fund.

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