Credit Suisse CEO Thiam overthrown by spy scandal
ZURICH (Reuters) – Tidjane Thiam has resigned as chief executive of Credit Suisse after a spy scandal that tarnished the reputation of one of Europe’s largest banks and shocked the Swiss financial community.
Thomas Gottstein, who heads the Swiss activities of Credit Suisse, will succeed Thiam, the Zurich lender announced on Friday. His departure ends a dispute with President Urs Rohner after revelations that the bank had snooped on former executives raised questions about his culture.
Espionage involving Credit Suisse surfaced in September when former star wealth manager Iqbal Khan, after defecting to compete with UBS, confronted a private investigator who was following him and his wife through Zurich.
A spokesperson for Swiss market supervisor FINMA said it was important that calm be restored to the bank. The watchdog said it was continuing to investigate the scandal.
Thiam’s exit, ending nearly five years as CEO of Credit Suisse, risks angering the international investors who had backed him, not Rohner.
“A period of instability will ensue as Mr. Gottstein attempts to lay the groundwork for future growth. We would assume investor dissatisfaction with the change, with fallout unknown at this point, ”KBW analysts said.
This was reflected in a 5% drop in the bank’s share price in early trade. It was only 0.6% lower at 3:13 p.m. GMT.
Credit Suisse’s board of directors said Rohner had his support to complete his term until April 2021.
Thiam, 57, was appointed CEO in 2015, having never previously worked for a bank. At Credit Suisse, the former head of Prudential focused on cutting costs, reducing risk, downsizing investment banking to focus more on wealth management and strengthening its balance sheet.
The engineering of this turnaround resulted in three consecutive years of losses, but the bank returned to profit in 2018, which drew applause for the former Ivorian government minister and management consultant McKinsey.
However, what the bank initially described as a dishonest spy case led by then COO Pierre-Olivier Bouee has broadened as details have emerged of other surveillance cases.
Swiss financial supervisor FINMA is investigating after the bank later admitted it had followed former HR director Peter Goerke.
Thiam reiterated that he knew nothing about these activities.
“I was not aware of the sighting of two former colleagues. This undoubtedly disrupted Credit Suisse and caused anxiety and injury. I regret that this happened and it should never have happened, ”Thiam said in the bank statement.
(Graphic: Credit Suisse share under Tidjane Thiam,)
“PAIR OF SAFE HANDS”
Gottstein, a prominent investment banker and wealth manager before taking over the domestic operations of Credit Suisse, had been pointed out by analysts as a potential successor to Thiam.
“Based on his in-depth and comprehensive experience in our business and given his impressive performance at the helm of our Swiss bank and his respect among our clients and employees, Thomas Gottstein is uniquely positioned to lead Credit Suisse towards l ‘future,’ Rohner said in a statement.
Gottstein will be the first Swiss citizen to lead Credit Suisse for almost 20 years. The 55-year-old has been at the bank since 1999, joining rival UBS. He spent most of his career working in the capital markets before taking over as CEO of Swiss bank from Credit Suisse in 2015.
He told Reuters he was planning a growth offensive.
Citigroup analysts described Gottstein in a note as a “pair of secure hands”.
Thiam’s resignation, effective from February 14 after the presentation of the results for the fourth quarter and full year 2019, took place Thursday during a meeting of the board of directors.
At the meeting in Zurich, the directors backed Rohner despite calls from Swiss investment adviser Ethos Foundation to resign.
“Urs Rohner has led the board commendably during this turbulent time,” board member Severin Schwan said in the bank statement.
“After careful deliberation, the Board of Directors was unanimous in its actions, as well as reaffirming its full support for the President to complete his term until April 2021.”
In Switzerland, Credit Suisse and UBS generally have a Swiss national as chairman or managing director.
Gottstein’s appointment could therefore pave the way for a non-Swiss president. A person familiar with the matter said Richard Meddings, a British banker who is expected to join the board, could succeed Rohner.
Andre Helfenstein, now Head of Institutional Clients of Credit Suisse in Switzerland, will succeed Gottstein as CEO of the Swiss business and join the Board of Directors.
Reporting by John Miller, Oliver Hirt, Brenna Hughes Neghaiwi and John O’Donnell; Editing by Sam Holmes / David Goodman / Alexander Smith / Jane Merriman