Losses from trades unwinding related to Archegos will be “very material” in relation to lending exposure for a business that is mark-to-market and holds liquid collateral, analysts led by Kian Abouhossein wrote in a note. They added that Nomura Holdings Inc.’s indication of potentially losing $2 billion and press speculation of a $3 billion to $4 billion loss at Credit Suisse AG is “not an unlikely outcome.”

Analysts and investors are trying to figure out the final losses to banks exposed to the Archegos implosion, with the task made harder by the opaque nature of the leveraged trading involved. JPMorgan had previously estimated losses in the range of $2 billion to $5 billion.

“We are still puzzled why Credit Suisse and Nomura have been unable to unwind all their positions at this point,” the analysts wrote, adding that they expect to see full disclosures from lenders by the end of this week.

The analysts advised investors to keep an eye on credit agencies’ statements as they expect poor risk management to be an issue.

That’s an emerging theme at Credit Suisse, where executives are expecting the loss related to Archego to run into the billions, according to people with knowledge of the matter. March’s blowups may wipe out more than a year of profits for the bank and threaten its stock buyback plans, as well as adding to the reputational hit from other missteps.

Buyback Risk

The bank’s plans to buy back 1.5 billion Swiss francs ($1.6 billion) of shares are at risk, according to Berenberg analyst Eoin Mullany. He estimates the lender could face losses of $3 billion to $4 billion.

“The hits just keep coming for Credit Suisse,” he wrote in a note Mullany.

Preceding the Archegos losses were the liquidation of its supply-chain finance funds linked to collapsed financier Lex Greensill and a writedown on a stake in hedge fund York Capital Management taken in the fourth quarter.

The buyback program resumed in January after having been suspended for nearly a year due to the pandemic.

Spared Losses

Wells Fargo & Co. did not experience losses tied to unwinding its relationship with Archegos Capital Management, the firm said Tuesday in a statement.

“We had a prime brokerage relationship with Archegos,” the bank said. “We were well collateralized at all times over the last week and no longer have any exposure.”