Credit Suisse CEO Choice Might Not Stem Disputes 

(Bloomberg) -- Credit Suisse Group AG Chief Executive Officer Tidjane Thiam’s ouster and the choice of an experienced hand as his successor might not be the end of conflict at the bank following a spy scandal last year, according to some analysts.

Credit Suisse stock fell as much as 5.1%, the steepest intraday decline since before the spying came to light in September, after the Zurich-based bank said Thiam will leave following the 2019 earnings presentation next week. Thomas Gottstein, head of the Swiss unit, will be promoted to the CEO post.

Thiam had been cleared in an internal probe of the scandal, but lost a boardroom showdown with Chairman Urs Rohner, with Credit Suisse’s 13-member board of directors rebuffing appeals from major shareholders to back the CEO. Gottstein is a 20-year Credit Suisse veteran and will be its first Swiss-born chief executive in almost two decades.

Here is what analysts and investors had to say:

JPMorgan, Kian Abouhossein

• Initial share price reaction is negative, given the high level of support for Thiam shown by some larger shareholders publicly
• Gottstein brings some element of continuity, given his long history with the Swiss lender
• Long-term performance of Credit Suisse depends on more management team turnover and resolving any deeper friction with its shareholders

Aramea Asset Management, Andreas Meyer

• CEO’s resignation is more than unfortunate as he strategically realigned the bank in a difficult phase and put it back on the right track
• However, in the past the bank has repeatedly encountered governance problems like corruption allegations and antitrust issues

Vontobel, Andreas Venditti

• The continued negative press, the rumored power struggle weren’t good things and the change at the top may bring some calm and restore confidence
• For employees too it will be helpful as they likely were distracted
• Gottstein is “very Swiss,” however with his background in investment banking and 30 years in London, his appointment shouldn’t be seen as a retreat from global ambitions

Citigroup, Andrew Coombs

• CEO succession was seen a distant prospect for most international investors, hence the move now comes as a surprise
• Believe the board has chosen a “safe pair of hands” to succeed Thiam
• Credit Suisse’s decentralized model and greater autonomy given to individual business heads could now assist Gottstein in steering the ship

Olivetree Financial, Harry Harutunian

• Thiam’s departure was not a complete surprise, but people saw it more as a kind of tail-risk event rather than a base-case event
• Says it is not a straightforward exit from the CEO and is “it’s not the end of the story, and may lead to more conflict with shareholders”
• Gottstein’s investment banking background is striking, though not necessarily a reason for Credit Suisse to change tack from Thiam’s efforts to de-emphasize that business

Barclays, Amit Goel

• Investors are asking whether shareholders who have publicly backed Thiam will look to reduce their holdings, and how long Gottstein will be CEO, with Rohner potentially leaving in 2021
• Uncertainty is likely to bring some share-price weakness, though investors may see Gottstein’s appointment as indicating limited restructuring and strategy change for now

--With assistance from Lukas Strobl and Sree Vidya Bhaktavatsalam.

To contact the reporters on this story: Jan-Patrick Barnert in Frankfurt at jbarnert3@bloomberg.net;Albertina Torsoli in Geneva at atorsoli@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Tom Lavell, Jon Menon

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