Bloomberg — The board of directors of Credit Suisse Group AG (CS) has held initial talks on whether to replace CEO Thomas Gottstein after a series of scandals and failures, people with knowledge of the matter have said.
A change in the bank’s leadership could come as soon as this year, said the people, who asked not to be identified because the deliberations are private. Although the board of directors continues to publicly express its support for Gottstein, some members are increasingly concerned that he is not in control of the bank’s problems.people said.
A year after the collapse of Archegos Capital Management, which saddled Credit Suisse with some $5.5 billion in losses, the bank is struggling to overcome a series of profit warnings and hits that have eroded investor confidence, weakened key businesses and caused an exodus of talent. Although the CEO inherited a number of problems, critics say his team should have managed Archegos’ risks better and paid more attention to the warning signs in its relationship with Greensill.
“We do not comment on rumors and speculation,” Credit Suisse said in a statement. “The president clearly endorsed Thomas Gottstein. Nothing has changed in this regard.”
Since the Archegos coup, which saw the departure of investment bank chief Brian Chin and chief risk officer Lara Warner, the bad news has continued apace. The bank fired reform-minded president Antonio Horta-Osorio after flouting Covid-19 rules and in recent quarters announced a series of surprise charges, including 703 million francs ($720 million) of legal expenses in the first quarter. Little by little, the ranks of the board of directors that Gottstein inherited have been replaced after successive coups, leaving the Swiss banker the last one standing after two consecutive tumultuous years.
The bank turned to Gottstein, a veteran of two decades, to restore confidence following Tidjane Thiam’s surprise departure in February 2020 in the wake of an espionage scandal. The Swiss-born bank’s first CEO in nearly two decades, he took on the dual challenge of ending infighting and boosting a share price that lost nearly half its value during Thiam’s tenure. This year alone the bank has lost more than a quarter of its market value.
At the time of his surprise appointment, Gottstein was seen as an attempt by the bank to install one of its own at the top in order to end an embarrassing streak of tabloid stories about the espionage scandal and return the bank to stability. Although he has a background in investment banking and success in running the bank’s profitable Swiss business, he lacks the international profile and experience of some of his predecessors.
Credit Suisse appointed Axel P Lehmann as chairman after he was appointed in January 2022 as an emergency replacement for financier Horta-Osorio.
The bank, which has warned that all the damage from one of the most turbulent periods in its history has yet to be accounted for, plans to host a “deep dive” event for investors on risk, compliance, technology and the management of the wealth later this year.
With the assistance of Jan-Henrik Förster and Marion Halftermeyer.
This article was translated by Estefanía Salinas Concha