Signs are mounting that Thomas Gottstein, CEO of Credit Suisse, is on borrowed time after the double hits of Greensill and Archegos.
Nearly five months after António Horta Osório and Thomas Gottstein posed for their first photo together as chairman and CEO, respectively, of Credit Suisse, the power dynamic is emerging: «There is the desire to give him [Gottstein] a chance, but there is no guarantee that it will work out,» the «Financial Times» (behind paywall) quoted a person familiar with their relationship as saying.
Horta Osório, a 57-year-old Portuguese-British banker who ran Lloyds until right before arriving in Switzerland, is mentoring and coaching Gottstein, the outlet reported. The characterization enfeebles Gottstein, who was plunged into the job 19 months ago during a corporate espionage scandal, at a time when Credit Suisse is grappling with Greensill as well as Archegos.
Paradeplatz Chatter
On his first day in the job, Horta Osório said Gottstein, a Swiss investment banker and 22-year veteran of Credit Suisse, enjoys the board's confidence. Since then, Zurich chatter has abounded that the CEO is living on borrowed time.
Gottstein oversaw the ill-fated decision to combine risk and compliance under Lara Warner, who departed as a result of the two most recent scandals. He was also at the helm of the Swiss bank when it reportedly ignored warnings as recently as last year over Archegos, a family office-hedge fund that wrought more than $5 billion in losses.
Chairman Giving Orders
The «FT» quotes an unnamed senior figure denying that Horta Osório wants to step into the CEO job himself. At the moment, Horta Osório is leading a three-person so-called tactical crisis committee, or TCC, with directors Richard Meddings and Christian Gellerstad, the outlet reports.
«Antonio is giving orders to Thomas [Gottstein] at these meetings. They are his decisions,» the outlet quoted a person involved as saying. Set up in agreement with Credit Suisse's regulator, Finma, during the pandemic, the TCC does not include Gottstein or finance chief David Mathers.
Board Blasted
Credit Suisse's board isn't spared by these sources: the body «had no real banking competence» in recent years. This is a stinging rebuke of ex-chairman Urs Rohner, a trial lawyer turned finance executive, and deputy Severin Schwan, a pharmaceutical executive credited with bringing on Horta Osório, and bankers like Kai Nargolwala, who has sat on Credit Suisse's board since 2008.
Experienced bankers among its directors such as Noreen Doyle and Richard Thornburgh – a former CSFB investment banker – hit term limits in 2017 and 2018 respectively. Gellerstad, a former Pictet wealth manager, and Meddings, who chairs TSB in Britain, joined the board in 2019 and last year, respectively; prominent enforcement from UBS and Lloyds is on its way next month.
Series Of C-Suite Hires
Since taking over from Rohner in April, Horta Osório has made a series of major changes. He is enlisting Pedro Rodeia, a McKinsey financial services heavyweight, to deliver a new Credit Suisse strategy due by year-end, according to «eFinancialCareers».
He has also hired Goldman Sachs A-listers David Wildermuth to replace Warner in the risk function and Joanna Hannaford to oversee technology and operations. The «FT» reports that Horta Osório's next focus is on rejuvenating Credit Suisse's 12-person top management, without elaborating.
Are Holdovers Vulnerable?
Several like Warner and top investment banker Brian Chin have left voluntarily, while human resources chief Antoinette Poschung retires early next year and operating chief James Walker is relinquishing the job to return to the U.S. Eric Varvel, the asset management boss who had touted Greensill funds as recently as four months before the blow-up, was replaced in March.
The only holdovers who might appear vulnerable are chief lawyer Romeo Cerrutti, a Rohner confidante, and Asia boss Helman Sitohang, who was reportedly a Greensill backer. The role of Mathers, the veteran finance chief who has survived three CEOs, is unclear.
