ZURICH Pressure on Credit Suisse CSGN.VX boss Brady Dougan to quit shows no signs of abating in Switzerland following this week's $2.5 billion settlement with the U.S. authorities over charges that it helped Americans evade taxes by hiding their assets in secret bank accounts.
The Swiss bank's board has backed the American chief executive over the deal, under which Credit Suisse pleaded guilty to criminal charges but held onto its New York licence and its legally protected client data.
However, that matters little in Switzerland, where banking privacy is embedded in its culture and identity and UBS UBSN.VX and Credit Suisse are seen as the twin pillars of a banking industry which accounts for 6 percent of the country's gross domestic product.
As a result, executives like Dougan, a 24-year veteran of Credit Suisse, and UBS boss Sergio Ermotti are subject to intense public scrutiny. More than 78 percent of newspaper Tages-Anzeiger's readers felt both Dougan and his boss, chairman Urs Rohner, should step down.
"Credit Suisse leadership has allotted itself lavish compensation year after year. If not because they are meant to take responsibility in a crisis, then why?" Swiss shareholder advisory group Actares said on Wednesday.
Dougan is receiving more stick in Switzerland than Rohner, in part because the American became the Swiss bank's face by testifying to an angry U.S. Senate subcommittee in February, but also because the CEO has been criticized for sticking with an investment banking strategy.
Dougan, an Illinois native and one of only three global bank CEOs still in their jobs following the financial crisis, had previously endeared himself to Switzerland in his seven years as CEO of Credit Suisse with a low-key and hard-working style.
An American investment banker who received an eye-watering 90 million Swiss franc ($100.90 million) payday five years ago, Dougan shuns overt displays of wealth, which plays well in Switzerland, where ostentation is frowned upon.
Outside of work, where he regularly puts in 18 hour days, he is renowned for being boring. Dougan drives a Prius and is rarely seen sipping anything stronger than Coke Zero.
But Swiss sentiment against Dougan hardened when Credit Suisse, the eighth most valuable Swiss brand according to consulting firm Interbrand, became the largest bank in decades to plead guilty to U.S. criminal charges.
A spokesman for Credit Suisse and Dougan declined to comment on calls for him to step down.
Dougan, who already faces calls from left-wing lawmakers to step down, was also blasted by an employee organization for having the "chutzpah" to blame a small group of Swiss-based bankers as the perpetrators without accepting any personal responsibility.
However, Dougan, who has never worked in Credit Suisse's private bank but would have been familiar with the business as part of top management since 2003, still has the trust of the Credit Suisse board, chairman Urs Rohner told Swiss newspaper Blick on Wednesday.
Asked on Tuesday about his future, Dougan said stepping down had "never been a consideration" for him. <ID:>nWEB00NH0
Dougan, who welcomed shareholders in German and French last week before switching to English in a nod to Credit Suisse's roots, usually weathers the Swiss bank's shareholder meeting with the same stone-faced manner that has led critics to call him robotic.
Yet he has shown a more vulnerable side in recent months.
"I'm going to do the very best job I can for this bank and I do that every day. I work as hard as I can to do that and I can tell you sincerely that is what I'm focused on," Dougan said in response to a question posed by Inge Ginsberg, a 92-year-old shareholder from Switzerland, at the shareholder meeting.
"I make a lot of mistakes, I'm sure. I'm not perfect in that but that is my goal every single day."
It was as close as Dougan has come to an emotional outburst in public, though associates say he can be quick to show flashes of humour in private.
It isn't enough for shareholders like Peter Stenz, a Zurich-based fund manager at asset manager Swisscanto who manages Credit Suisse shares worth roughly 150 million Swiss francs ($168.16 million). Stenz says Dougan and Credit Suisse's board are to blame by trying to draw out the three-year dispute in the hope of reaching a cheaper settlement.
"Credit Suisse's board and management must admit to have misjudged the situation and to have pushed their luck," Stenz said.
"I would expect those responsible to admit the lapse and admit they didn't achieve what they set out to do here."
Dougan initially won plaudits from investors for steering Switzerland's second-largest bank through the post-Lehman Brothers turmoil, moving swiftly to cut riskier trading activities and avoided getting entangled in U.S. subprime mortgages to the same degree as UBS, which took a state bailout in 2008.
Recent years have been far tougher. In 2012, the Swiss National Bank surprised Dougan with an order to raise capital. He pulled off a host of measures to raise 15 billion francs, including selling prime Zurich real estate and issuing convertible bonds to existing investors such as Qatar.
Dougan's strategy of sticking with a full-range investment bank, where business has proved difficult in recent quarters, may add to the domestic pressure on him.
Oswald Gruebel, who had a turn at running both big Swiss banks and was succeeded by Dougan at Credit Suisse, said the American has yet to deliver on a big bank strategy, which combines private banking with a full-scale investment bank.
"Dougan really, truly understands investment banking, but it is getting a lot more difficult to earn money there," he told Reuters.
In addition Rohner said in an interview in Neue Zuercher Zeitung on Wednesday that the bank was thinking of stepping up the pace of cutbacks to risk-taking at the investment bank, where a big drop in bond trading revenues caused first-quarter net profits to fall by more than a third.
(Additional reporting by Rupert Pretterklieber and Joshua Franklin in Zurich; Editing by Greg Mahlich)