Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Exclusive-Major Credit Suisse shareholder calls for new CEO

Stock Markets May 19, 2022 13:19
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Chief Executive Officer of Credit Suisse, Thomas Gottstein, speaks during the fourth annual Future Investment Initiative in Riyadh, Saudi Arabia, January 27, 2021. REUTERS/Ahmed Yosri

By Oliver Hirt and Brenna Hughes Neghaiwi

ZURICH (Reuters) - Credit Suisse (SIX:CSGN) should start looking for a new CEO to replace Thomas Gottstein, top-ten shareholder Artisan Partners told Reuters, becoming the first major investor to publicly call for such a move at the scandal-hit Swiss bank.

"If you sit down and look at what's happened under (Gottstein's) leadership, I think it's pretty obvious that it has not gone well. And there is no reason why someone like that should sensibly stay in their role," Artisan's Managing Director David Samra said in an interview.

Pressure has been mounting on Gottstein - the last Credit Suisse executive standing after a series of culls - over major scandals and losses racked up during his two year tenure that have hammered its shares and angered investors.

Credit Suisse emphasised Chairman Axel Lehmann's support for Gottstein after a Bloomberg report on Friday about early talks over a potential replacement.

The bank reiterated this on Thursday.

"The chairman clearly endorsed Thomas Gottstein. Nothing has changed in this regard," a spokesperson said.

Artisan - Credit Suisse's ninth biggest shareholder with a 1.5% stake, according to Refinitiv data - said finding the right CEO to turn the bank around was Lehmann's greatest challenge, adding it could take time and Gottstein should only be replaced once a top-notch successor had been found.

Gottstein in late 2020 promised a "clean slate" for the bank after a turbulent first year in office, which began with a spying scandal that cost his predecessor his job and ended with writedowns and litigation.

But troubles only escalated, with a $5.5 billion loss from the unravelling of U.S. investment firm Archegos and the collapse of $10 billion worth of supply chain finance funds in March 2021 prompting management ousters, investigations, and a capital increase - followed by further losses and fresh legal cases.

Other shareholders and investor advisers are unhappy.

"After two years in office, there's been anything but improvement," Karin Landolt, co-managing director at investor advisory firm Actares, said of Gottstein's tenure, which began in February 2020.

However, "a change (of management) for change's sake will not automatically bring Credit Suisse success and restore its good image," Landolt said, adding Actares's key focus was on governance overhaul rather than personnel decisions.

David Herro of Harris Associates, Credit Suisse's third-biggest shareholder according to Refinitiv, told Reuters it was for the board to decide Gottstein's future.

Artisan began building its stake in Credit Suisse following the Archegos investment and Greensill supply chain debacles, and as Antonio Horta-Osorio was brought in as a chairman with a promise to overhaul the bank's culture and strategy.

"When (Horta-Osorio) joined Credit Suisse, and then subsequently a number of issues happened in the share price collapse, we became very interested," Samra said.

But Horta-Osorio left the bank abruptly in January following breaches of COVID-19 quarantine rules.

Samra said the bank should be given two or three years to execute Horta-Osorio's strategy, and give a new CEO time to get up and running before considering more drastic measures.

"We believe that with (the right leadership executing) the right strategy, emphasizing the wealth management business, the real underlying value of Credit Suisse can be recognized in the share price," he said.

"(But) if you don't have the right people to run it and you're not making any progress, then I think you need to start thinking about simplifying the organisation," he said.

That could involve selling some units or separately listing them, or seeking a merger with a Swiss or U.S. bank, Samra said.

While he would leave all the current assets in place under the right CEO, Samra said finding that person could be "very, very difficult".

"There are no obvious candidates that we can identify. And we've talked to many executives in the industry. So I think that's Axel's hardest job right now."

Exclusive-Major Credit Suisse shareholder calls for new CEO
 

Related Articles

Asian Stocks Down as Oil Rises on Tight Supply Concerns
Asian Stocks Down as Oil Rises on Tight Supply Concerns By Investing.com - Jun 28, 2022

By Zhang Mengying Investing.com – Asia Pacific stocks were mostly down on Tuesday morning after Wall Street fell and oil prices rose on tight supply concerns. Japan’s Nikkei 225...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email