Credit Suisse Is Losing Mideast Staff Over a Toxic Work Culture
(Bloomberg) -- Bruno Daher, Credit Suisse Group AG's top executive in the Middle East, had an unusual message at a May sales meeting: an apology. He was sorry about having said earlier that he’d put a gun to his bankers’ heads if they didn’t shape up. He tends to speak in metaphors, he explained.
The contrition was striking because it contrasted so sharply with his typical approach. Behind the scenes at the operation that tends to fortunes in the region, Daher was better known for fiery displays and direct personal attacks, harangues peppered with expletives. He once tossed a Swiss flag into the trash and wielded threats that have prompted complaints from his staff, according to people who have worked with him.
Daher’s management style has helped build a 75 billion Swiss franc ($82 billion) business and made Credit Suisse a regional powerhouse in his 15 years there. He has also attracted a loyal coterie of lieutenants who followed him from Merrill Lynch, and fostered deep relationships with the Gulf’s most important royals and executives.
But some employees have had enough, and the ground is shifting beneath his empire. The testosterone-driven workplace that has famously characterized the modern finance industry is being increasingly questioned just as Credit Suisse executives struggle to retain top talent and recover from a string of missteps — including the implosion of Greensill Capital, a partner in what was once a $10 billion asset-management strategy that Daher and his team pushed aggressively.
At least five top bankers — one who oversaw about $6 billion in client assets — and more than 20 junior relationship managers in the Middle East and Africa, left Credit Suisse since the start of 2019.
More broadly, Chairman Antonio Horta-Osorio has vowed to undertake a global corporate strategy review after taking over in the wake of a pair of disasters. The collapse of prime brokerage client Archegos Capital Management left the bank with $5.5 billion in losses, just after the Greensill meltdown that may saddle clients with billions of their own.
Interviews with 26 people familiar with Credit Suisse’s Middle East and Africa wealth business — including past and present employees, clients and headhunters — reveal a toxic office culture beset by intimidation and bullying; the pressure to deliver, they said, has pushed some to take excessive risks that contributed to client losses.
Some said they suffered physical symptoms such as chest pains, and that they’re traumatized even just recalling their experience of working under Daher. At least three complaints by employees were filed internally in the last five years, alleging mistreatment by Daher or his top aides, according to six of the people who spoke to Bloomberg. The outcome of the complaints wasn’t known.
Current and former Credit Suisse bankers said they were willing to speak about their experience under Daher now because their career prospects — and visas — are no longer tied so tightly to Credit Suisse. They have more potential options now that other banks, including UBS Group AG, Julius Baer Group Ltd., and Goldman Sachs Group Inc., intend to expand in the region, though they asked not to be named for fear of retribution.
Daher declined to comment through the company’s lawyers. Credit Suisse issued a blanket denial when asked to comment on the incidents described in this story. “The bank firmly rejects the allegations made, which are unfounded, false or taken completely out of context. Credit Suisse is a leading wealth manager in the Middle East under the strong leadership of Bruno Daher since 2006,” the bank said in a statement. “His team has been praised through the winning of multiple industry awards. Furthermore, the business has been regularly reviewed by compliance and audit. The results have proven the effectiveness and efficiency of both controls and culture in place.”
The firm said in a separate statement that it follows a “strict distribution process” to ensure products align with clients’ risk profile.
Employees recalled limited intervention by top Credit Suisse executives in Zurich, though one such instance was the removal of part of a video from the bank’s intranet after a 2014 gathering. During the event, in which more than 300 people tuned in, Daher bashed his Switzerland-based employees, comparing them unfavorably to his teams on the ground. After warning the bankers to raise their game or look for new jobs, he told them he’d thrown a Swiss flag in the trash — “where it belongs,” he was heard saying.
Senior executives at the bank at the time, including former CEO Brady Dougan, declined to comment.
The incidents continued. In 2016, during a visit to the bank’s Johannesburg office (now closed), Daher stood up to speak to the group of about 10 bankers he’d invited out for a team dinner. After a few minutes, Daher’s speech turned into a scolding loud enough for other diners at the restaurant to hear. He only stopped when an employee pointed out that he was in public.
One witness recalls an incident in 2017 when Daher publicly and profanely berated a manager in the lobby of the bank's open-plan offices in the Dubai International Financial Centre. He was livid over the cancellation of a meeting with a member of the emirate’s ruling family set up for a visit by then-international wealth chief Iqbal Khan.
A French national born in 1958 in Syria with ties to Jordan, Bahrain, and Lebanon, Daher is a cigar-smoking football fan who roots for his alma mater, Boston College. He started at Merrill Lynch and worked his way up on a team that tended to the top Middle East clients from postings in Paris, Geneva, and Bahrain. People who worked with him there said that his group made headway in covering the region’s richest, but he wasn’t a rainmaker. Rather, they said, Daher excelled at making key hires to spur expansion.
After 21 years there, Daher jumped to Credit Suisse in 2006, joined by a group of colleagues, some of whom have remained by his side for the last decade.
Daher took over the business as Credit Suisse was on a growth spree in emerging markets. The bank had just received its license to operate as one of the few to have a full-fledged banking operation in Dubai. He expanded the business to include an equity platform, private lending and new offices in Beirut, Bahrain, Doha, and Saudi Arabia. He also helped implement the integrated approach for which the bank is known, viewing clients’ personal wealth as well as their companies as complementary revenue streams.
The region received extra focus in 2015 when Khan was promoted to run the international wealth business, which included the Middle East and Africa. Daher worked closely with Khan to look at expansion prospects, including entering Saudi Arabia’s onshore market.
Khan, who moved to UBS in 2019, declined through a spokesman to comment for this story.
Daher’s shop gained a reputation for high turnover. For example, in early 2019, Credit Suisse added about 25 private bankers, and within a span of 18 months only about five remained.
Some who left described a boot camp where warning letters arrived in six or so months, delivering the stark message to perform or face the consequences, while they complained that coverage of key clients shifted to those perceived as Daher’s favorites. Some of his confidants openly mocked new hires and warned that they would not last more than a few months. The churn of bankers brought in new assets while helping keep a lid on costs.
Daher often told his employees that they were either with him or against him, and wished them luck finding a job elsewhere. Indeed, some ex-employees recall threats to destroy their careers such as spreading negative feedback in the tight-knit market or launching investigations into departing employees to try to claw back bonuses. Complicating matters is that work visas in the region often expire around a month or so after job loss; many employees said they were stressed about the prospect of having to relocate their families after years of being rooted.
Individual and team performance were displayed on charts during meetings and shared among Daher’s 100-plus person group. Falling short of targets could lead to becoming the subject of his next tongue-lashing.
Staffers said that Daher is explicit in his demands that his staff adhere to all compliance rules, including know-your-customer checks and risk assessments. But the pressure to perform, they said, pushes some to the limits.
Credit Suisse clients in the region — including the ex-Qatari prime minister Sheikh Hamad bin Jassim Al Thani — were among the most exposed by the unraveling of Greensill. Credit Suisse sold more than 10% of the total amount in the Greensill-linked supply-chain funds through its private banking arm in the Middle East and Africa, Bloomberg has reported.
Some bankers were given targets to sell at least 1 million Swiss francs of the Greensill-linked funds. Since the products were marketed as virtually risk-free cash-like instruments, Daher told the bankers there was no reason not to put every client in the fund, according to three people with direct knowledge. In a statement, Credit Suisse said Daher didn’t make such a remark and there were no sales targets for specific products.
It is still unclear how much the funds’ closure will ultimately cost investors. Some of those investors were levered, increasing the scale of their potential losses.
It isn’t the first time that Daher’s ranks had to deal with unhappy clients. In 2014, Daher’s bankers in Beirut sold levered bets on the Swiss franc currency. Clients ended up losing heavily from margin calls when the Swiss National Bank unexpectedly abandoned the franc’s capped value linked to the euro. One Middle East client who lost between $10 million to $20 million was made whole by the bank, two people familiar with the matter said.
Some of the bankers involved were reprimanded and moved out of the country to Dubai, where at least one continues to work.
Now, the high profile departures in Daher’s unit may complicate the bank’s position in the market.
In perhaps the harshest blow, Desh Sharma, a wealth banker who built a book of almost $6 billion in assets, followed Khan to UBS’s wealth unit in late 2020. He brought with him his ties to chief executives at some of the biggest businesses in the region and a team of four other bankers. Former colleagues describe him as a tireless operator who brought in investment-banking style deals that generated tens of millions in dollars of revenue per transaction. Sharma often worked with Remi Mennesson, who led the strategic transactions group at Credit Suisse, and now does the same thing for UBS, which he joined a few months before Sharma.
Several other managing director-level managers have left, including Ravi Venkataraju, Christian Zouein, and Fady Eid. One managing director who left in recent months had been at Credit Suisse for 16 years and was only a few years from retirement, but decided he no longer could tolerate Daher, according to people who spoke to him.
"The attrition rate over the past seven years has remained stable and is in line with general market fluctuation financial services institutions are experiencing in the region,” the bank said in a statement. “And we continue to attract talents.“
At UBS, Khan aims to double assets the bank manages in the Middle East. He’s opened up a new hub in Qatar, potentially to target one of the world’s largest sovereign wealth funds, the Qatar Investment Authority — a major Credit Suisse shareholder and client. With every employee rivals attract, the closer they get to poaching key wealth and sovereign wealth fund clients, eating into the powerful position Daher has built. —With Matthew Martin and Dinesh Nair
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