Credit Suisse Chairman Conduct in Focus on Quarantine Breaks
(Bloomberg) -- Antonio Horta-Osorio’s tenure as Credit Suisse Group AG chairman has been focused on moving the firm past scandals. But the lender’s latest headache stems from his own conduct.
The Portuguese banker attended the Wimbledon tennis finals in London in early July, a period when arrivals from Europe were obliged to undergo a period of quarantine, according to a report by Reuters, citing unidentified people familiar with the matter. The allegation comes weeks after Horta-Osorio was forced to apologize for “unintentionally” breaking Swiss quarantine rules earlier this month by flying to the Iberian peninsula aboard a private jet.
A spokesman for Credit Suisse declined to comment on the matter.
Horta-Osorio, who was appointed as chairman in April, has been trying to steer Zurich-based Credit Suisse past a disastrous year when the collapse of Archegos Capital Management and the freezing of funds tied to Greensill Capital caused billions of dollars in losses and led to the departure of numerous senior managers. The chairman has repeatedly cited the need to revamp the bank’s culture with a focus on individual responsibility.
“We are committed to developing a culture of personal responsibility and accountability, where employees are, at heart, risk managers,” Horta-Osorio said in a statement in July when the bank published a scathing report summarizing the failures that had led to the loss incurred from the Archegos collapse.
The call came in the same month as the Wimbledon tournament. The apparent breaking of U.K. quarantine regulations emerged in an internal investigation into the December incident, Reuters said. The findings of the investigation have been passed to the bank’s board which will decide if any further action needs to be taken, the report said.
The impression that Horta-Osorio is following his own set of rules is likely to feed discontent within the bank, and more broadly. In the U.K., the government of Boris Johnson has been blasted for apparently holding Christmas parties last year while the public were in lockdown. Within finance, senior executives including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon have on occasion been given exemptions from local quarantine rules.
“When you’re overseeing billions, it’s hard not to take yourself very seriously, but that’s a misunderstanding that many bankers are trapped in and it’s where the public’s sympathy crumbles,” said Hans-Peter Burghof, a finance professor at the University of Hohenheim in Stuttgart. “Staff understand that a chairman has different responsibilities and that they may need to be seen at events to stay in contact with other decision-makers. You can argue that exceptions should be made, but right now the rules apply to everyone.”
Horta-Osorio has already apologized for leaving Switzerland “prematurely” on Dec. 1 following his entry on Nov. 28. He received feedback both from the local canton and the federal government that there would be no special exemptions and that he should remain in isolation for the full period. Swiss newspaper Blick reported that even after the order, Horta-Osorio left for the Iberian peninsula on Dec. 1 aboard a private jet.
It’s not the first time that Horta-Osorio has received unflattering media coverage. In 2016, when he was CEO of Lloyds Banking Group Plc, a British newspaper reported details about his private life and raised questions about his expenses while on a business trip to Singapore. The U.K. mortgage lender, which Horta-Osorio restored to profitability after the financial crisis, said at the time that he did not break its expenses policy.
The centerpiece of Horta-Osorio’s tenure at Credit Suisse has been a much-touted strategy revamp announced in November, which shuttered some riskier businesses and expanded a pivot to wealth management. Investors were not convinced that the changes were enough, and the bank’s share price has continued to decline. Overall, Credit Suisse has lost more than 22% this year.
“Credit Suisse’s management seems not to have learned from Spy-Gate, Mozambique and the other scandals of recent years. That hurts staff and shareholders,” said Klaus Fleischer, a professor specializing in finance at the Munich University of Applied Sciences. “Horta-Osorio no longer seems like a viable role model for the swift cultural change Credit Suisse needs.”
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