New Credit Suisse chair has grim streak to break

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3 minute read

Antonio Horta-Osorio speaks at the British Chambers of Commerce annual meeting in central London, Britain, February 10, 2015. REUTERS/Stefan Wermuth

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LONDON, Jan 17 (Reuters Breakingviews) - Credit Suisse (CSGN.S) is proving something of a graveyard for the reputations of once high-flying international financiers. The Swiss bank announced on Monday that Chair António Horta-Osório had stepped down following a board investigation. It’s been less than a year since he arrived to stabilise the lender still reeling from the ousting of former Chief Executive Tidjane Thiam. New broom Axel Lehmann, a former UBS (UBSG.S) bigwig, has to hope his reputation is more durable.

Credit Suisse appeared to have scored a bit of a coup last year when it recruited Horta-Osório, who had led the turnaround of Britain’s Lloyds Banking Group (LLOY.L) following the financial crisis. The Portuguese banker made an immediate impact following his arrival in Zurich, settling a Mozambican scandal, drawing a line under the spying saga that toppled Tidjane, and unveiling a new strategy to shift capital from investment banking to wealth management.

Yet Horta-Osório’s personal conduct appears to have fallen short of the high standards he set for the bank. Early in December he admitted to “unintentionally” breaching Switzerland’s Covid-19 quarantine rules. An internal investigation subsequently found that he had also broken British rules when attending the Wimbledon tennis finals in July, Reuters reported read more last month. That was hard to square with his desire to improve Credit Suisse’s culture and focus on “personal responsibility and accountability”.

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Horta-Osório may have salvaged some of his good name by quickly accepting the consequences of his actions. However, another round of boardroom upheaval is the last thing Credit Suisse needs. The bank still faces multiple lawsuits and investigations over the collapse of both hedge fund Archegos, which cost it $5.5 billion, and supply-chain lender Greensill.

That task now lands in Lehmann’s lap. Before joining the Credit Suisse board last year, he spent more than a decade at UBS, serving as chief operating officer and head of the Swiss bank’s domestic unit. That experience should help to calm local regulators and politicians. Indeed, alongside CEO Thomas Gottstein, it’s the first time in two decades that both of Credit Suisse’s top jobs are occupied by Swiss nationals. International investors who had pinned their hopes on Horta-Osório’s turnaround skills will take more convincing.

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CONTEXT NEWS

- Credit Suisse said on Jan. 17 that Chair António Horta-Osório had resigned following an investigation commissioned by the board. The Swiss bank said Axel Lehmann would become its new chair, effective immediately.

- In December, Reuters reported that a preliminary investigation had found that Horta-Osório attended the Wimbledon tennis finals during a visit to Britain when the country’s Covid-19 rules required him to be in quarantine, citing two sources familiar with the matter. Horta-Osório had admitted to breaching Switzerland’s COVID-19 rules during a visit to the country on Nov. 28.

- Horta-Osório said: “I regret a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally. I therefore believe that my resignation is in the interest of the bank and its stakeholders at this crucial time."

- Lehmann, a former executive at rival bank UBS, said: “We have set the right course with the new strategy and will continue to embed a stronger risk culture across the firm.”

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Editing by Antony Currie and Thomas Shum

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