Credit Suisse Group AG Chief Executive Officer Tidjane Thiam was ousted in a power struggle with the chairman over a spying scandal, sending shares down 5% on doubts over the bank’s future under a new boss.
Thiam, who had the support of key shareholders after overseeing a turnaround at the lender, will be replaced by Thomas Gottstein, a 20-year veteran of the bank who leads the Swiss unit. The bank also said Chairman Urs Rohner has the board’s “unanimous” backing to complete his term until April 2021. Thiam will step down after presenting the Zurich-based bank’s fourth-quarter and full-year results next week, the lender said in a statement on Friday.
The decision is the culmination of a conflict between Thiam and Rohner that escalated after a recent spying scandal overshadowed the bank’s turnaround and prompted difficult questions about the culture at the top of the firm. While Thiam, 57, was cleared in an internal probe and a close lieutenant of his took the fall, the bank has struggled to move beyond the scandal after more cases surfaced.
Credit Suisse shares dropped as much as 5.1% on the news in early Zurich trading.
Top shareholders including Harris Associates, Silchester International Investors and Eminence Capital had warned the board of directors ahead of this week’s meeting that they shouldn’t take action against the CEO. Instead, they urged Rohner to back Thiam or step down himself, in an unusual public display of support for the CEO. Demands that Credit Suisse’s board ignored.
“Tidjane has made an enormous contribution to Credit Suisse since he joined us in 2015,” Rohner said in the statement. “It is to his credit that Credit Suisse is standing on a very solid foundation and has returned successfully to profit.”
For Thiam, who was born in Ivory Coast and previously held top roles at Aviva Plc and Prudential Plc before Rohner hired him in 2015, the departure blemishes a record that includes a pivot away from volatile trading and toward the more stable business of catering to affluent clients. While the shares lost about half of their value during his tenure, he won shareholder support for stabilizing the franchise.