12.98 -0.64 (-4.70%)
Pre-market: 5:03AM EST
|Bid||12.99 x 28000|
|Ask||0.00 x 29200|
|Day's range||13.56 - 13.66|
|52-week range||10.94 - 14.12|
|Beta (5Y monthly)||1.47|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||0.26 (1.87%)|
|Ex-dividend date||02 May 2019|
|1y target est||17.41|
Climate activists clad in Titanic-era costumes gathered in a rubber dinghy outside Credit Suisse's headquarters on Thursday, to urge incoming chief executive Thomas Gottstein to steer the bank off a climate "collision course". "Credit Suisse is like the Titanic on collision course with the iceberg of climate chaos," activist Beate Thalmann said. A man, wearing a captain's hat, scraped a paddle against the sidewalk of Zurich's Paradeplatz while other protesters with instruments gestured to Celine Dion's song "My Heart Will Go On" from the 1997 film about the stricken liner.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Tidjane Thiam’s final results as head of Credit Suisse Group AG were overshadowed by volatility in the investment banking and trading businesses that he had sought to reduce with a shift to wealth management.A pretax loss of about 60 million francs ($61 million) at the investment bank was worse than analysts had expected, while the rebound in profit at the global markets business in the final quarter of the year didn’t match forecasts. That’s been a pattern of Thiam’s tenure, where unpredictable earnings at the two have often overshadowed gains in its key private banking unit.Thiam is presenting a mixed set of numbers after a tumultuous four years in charge, marked by a painful restructuring that tapped shareholders for billions of funds and saw the once-revered Wall Street trading house pare back trading. The Ivorian, after exiting overhaul mode, saw the final months of his tenure sink into tabloid scandal after a feud with his former head of wealth management escalated into a fully-fledged corporate spying scandal, culminating in news of his exit last week.The shares fell as much as 3% in early Zurich trading and were 0.6% down as of 10:20 a.m.What Bloomberg Intelligence Says:Credit Suisse’s strategy will remain stable, in our view, based on incoming CEO Thomas Gottstein’s comments with 4Q results. Wealth flows seem light, though above-consensus trading was strong and investment-banking fees support some management and policy changes late in 2019. Outgoing CEO Tidjane Thiam said 1Q business is off to a “flying start,” a view that supports our view that capital markets revenue trends are generally healthy.\-- Alison Williams, BI banking analystThiam’s accomplishments include slashing costs, improving trading results and pivoting Credit Suisse to focusing on managing money for the rich, following in the footsteps of a similar strategic move by rival UBS as he sought greater predictability in earnings. His restructuring has been showing signs of bearing fruit before bizarre recent disclosures -- executives spied upon, grudges among top managers -- forced the board to take action against him in an attempt to stem months of bad press.In terms of the most recent quarter, the international wealth management business, cornerstone of the bank’s strategy under Thiam, saw both revenue and pretax profit beat estimates, though results were boosted by a 192 million-franc revaluation gain from its equity investment in Swiss stock exchange Six. The Swiss Universal Bank, which falls under incoming CEO Thomas Gottstein, also did better than expected. Thiam can also point to improved capital buffers and revenue as another positive, though a surprise 326 million-franc legal provision reduced earnings.“I feel like the machine is turning and producing better and better results,” Thiam said in a Bloomberg Television interview on Thursday, striking a confident tone about the start to the year. The first quarter is off to a “flying start,” he said.Here are some of the highlights of fourth quarter earnings:Net income of 852m francs vs estimates of 934m francsRevenue of 6.19b francs vs estimates of 5.56b francsGlobal markets revenue 1.31b francs vs estimate of 1.19bCET1 ratio of 12.7% vs 12.4% at end of previous quarterInternational wealth management revenue 1.64b francs vs 1.55b francsThiam’s TroublesGottstein, a 20-year Credit Suisse veteran, is the bank’s first Swiss chief in almost two decades. His biggest achievement until now was overseeing one of the crown jewels of the lender, the unit known as Swiss Universal Bank. A sort of miniature Credit Suisse focused on the domestic market, it is the biggest contributor to pretax profit and includes a private banking arm as well as investment banking.Gottstein will now have to persuade investors -- especially those who backed Thiam in the final days of the showdown with Chairman Urs Rohner -- that he can translate his experience as head of the Swiss unit onto a global scale and build on the turnaround while keeping other top managers onside. While shareholders including Harris Associates, the bank’s largest, have offered their support for Gottstein, it also repeatedly called on Rohner to step down, suggesting the drama may not be over.The origins of the bank’s troubles can be traced back to at least a year ago, when Thiam and Khan got into an altercation at a party. While their falling-out didn’t become public until later, inside the bank it was an open secret that the relationship had soured. Reports varied on the origins of the dispute, with some saying it was personal and others hinting at frustrated ambition and professional jealousy. The upshot: Khan left Credit Suisse in July and announced shortly after he was joining UBS.The situation only worsened from there. By September, it emerged that Credit Suisse had hired private investigators to spy on Khan and prevent him from poaching former colleagues. The allegations -- tabloid fodder for weeks -- forced Credit Suisse to start an inquiry into the surveillance. While that cleared Thiam, he was damaged after a close confidante took the fall. Then a second spy case surfaced, prompting Rohner to start succession planning, according to people with knowledge of the matter.Thomas Gottstein will take over with the task of brokering peace among executives and restive stockholders -- some of whom are still calling for Chairman Urs Rohner to follow Thiam out the door. Gottstein will be the third chief executive officer under Rohner’s Chairmanship.(Adds comments from Bloomberg Intelligence in fifth paragraph.)To contact the reporters on this story: Patrick Winters in Zurich at email@example.com;Marion Halftermeyer in Zurich at firstname.lastname@example.orgTo contact the editors responsible for this story: Dale Crofts at email@example.com, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Thiam reported a 40% jump in full-year profits and better-than-expected revenue growth, just a day before he is due to leave the bank over a spying scandal.
Credit Suisse posted its highest annual profit in nearly a decade on Thursday, but volatile earnings at its investment bank and trading divisions muted outgoing Chief Executive Tidjane Thiam's swan song. The 57-year-old Franco-Ivorian native will leave the Swiss bank on Friday following a spying scandal which clouded the final overview of the turnaround he has led since joining Credit Suisse in 2015. Thiam said Switzerland's second-biggest bank would continue to benefit from the bet it made on global wealth nearly four-and-a-half years ago, shortly after his arrival.
Credit Suisse Chairman Urs Rohner does not expect to be voted out of office before his term ends after this week's departure of Chief Executive Tidjane Thiam over a spying scandal. "I am not afraid of being voted out of office," Rohner was quoted as saying by newspaper Schweiz am Wochenende on Saturday, adding that the supervisory board had acted unanimously in deciding with Thiam that he should step down. Credit Suisse, which is Switzerland's second-largest bank and among the biggest in Europe's largest, hopes Thiam's exit will draw a line under the scandal that hit its reputation and shocked the Swiss financial community.
(Bloomberg) -- Credit Suisse Group AG ousted Chief Executive Officer Tidjane Thiam, a move that the bank’s chairman called an attempt to fix its reputation after a damaging spying scandal.“We saw a deterioration in terms of trust, reputation and credibility among all our stakeholders,” Chairman Urs Rohner said Friday after he rejected calls from major U.S. and U.K. shareholders to back Thiam. He said the bank’s reputation was particularly damaged in Switzerland, which accounts for about 40% of the bank’s pretax income.Rohner is turning to Thomas Gottstein, a two-decade Credit Suisse veteran who heads the Swiss business, to restore investor confidence after the shock departure. He’s the first Swiss-born CEO of the bank in almost two decades and takes on the dual challenge of putting a stop to the infighting and boosting a share price that lost almost half its value during Thiam’s tenure.Thiam’s exit marks the culmination of a conflict with Rohner that escalated over the CEO’s dispute with former international wealth management head Iqbal Khan. After Khan said he was quitting to join cross-town rival UBS Group AG, one of the Thiam’s top deputies hired detectives to follow him -- a tactic that sparked an international scandal when it became public.While Thiam, 57, was absolved of responsibility in an internal probe and the board blamed a close lieutenant, the bank has struggled to contain the crisis ever since. Further spying incidents have come to light, unsettling Swiss regulators who have launched their own inquiry into the culture at the top of the firm.The second incident “made the situation worse,” Rohner said. It became clear “that there was more of a pattern.”Top shareholders including Harris Associates, Silchester International Investors and Eminence Capital had said Rohner should be the one to go if he couldn’t back Thiam. Rohner’s backers saw the high-profile demands as an unseemly gambit, according to a person familiar with the matter. Meanwhile, the chairman lined up support behind the scenes from other shareholders for the board, including Qatar’s sovereign wealth fund, the person said.The chairman’s focus on the damage done in Credit Suisse’s home market -- “among all of our stakeholders, clients, employees, regulators” -- contrasts with complaints from non-Swiss investors, notably David Herro, deputy chairman of Harris Associates, who said concerns were limited to the Zurich financial district.Herro stood by his criticism of Rohner, calling on him to quit. “Our worry is that you have this new CEO who is capable and talented but above him, a chairman who is less than capable and talented and a board who seems to just mimic, just follows blindly whatever he says,” Herro told Bloomberg TV.“We agree to disagree,” Rohner said.While Credit Suisse’s profit has increased for three consecutive years under Thiam, who last year exited a painful three-year restructuring that included tapping shareholders for billions of francs, its stock has fallen more than UBS and the Stoxx 600 Banks Index. The shares pared losses later in the day after initially declining 5.1% and were trading little changed at 12.76 francs at 4:53 p.m. in Zurich.“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.Thiam took over at Credit Suisse in mid-2015 and quickly outlined a plan to slash costs, boost profitability and increase his firm’s financial strength. A former politician and insurance executive, he had no direct experience in investment banking, a business that became one of his biggest headaches. He was blindsided by losses at the trading unit in 2016, pushing him to accelerate cost cuts.Thiam’s TroublesThe latest troubles started in September when Swiss media reported Khan, who had left for crosstown rival UBS Group AG, confronted his pursuers in downtown Zurich. Embarrassing disclosures followed, including accounts of the personal feud between Thiam and Khan and the suicide of a contractor, rattling business circles in a city that normally enjoys a reputation for quiet professionalism.An internal probe concluded Thiam didn’t know about the spying, and that Chief Operating Officer Pierre-Olivier Bouee was responsible. Bouee was fired late last year. It later came out that human resources chief Peter Goerke was also followed, which the bank also blamed on Bouee.“I had no knowledge of the observation of two former colleagues,” Thiam said in the Friday statement. “It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place.”A third spying case, involving a former Credit Suisse employee in the U.S., was also probed and rejected by the bank. However, lawyers for Credit Suisse were still looking into the matter as recently as last week, Bloomberg reported on Tuesday.Thiam’s resignation after prominent overseas shareholders had backed him marks a victory for the Swiss establishment. A former lawyer who has been chairman of Credit Suisse for a decade, Rohner’s leadership “during this turbulent time” was praised by lead independent director Severin Schwan, CEO of Swiss pharmaceuticals company Roche Holding AG.Gottstein is CEO of Credit Suisse Switzerland and has been in the banking industry for 30 years, including more than 20 at Credit Suisse. His experience includes 13 years in investment banking in London, as well as in private banking. The unit, known as the Swiss Universal Bank, is a sort of miniature Credit Suisse focused on the domestic market. It’s the biggest contributor to pretax profit and includes a private banking arm as well as investment banking.The new CEO also sits on the board the regulator Finma. It’s unclear what impact the change in leadership at Credit Suisse will have on its investigation into the scandal. Finma said in December that it had appointed an independent auditor to investigate the case and that such probes typically take several months. No one at the regulator was immediately available on Friday morning to comment on the news.“Gottstein is very Swiss, it’s a big contrast,” said Andreas Venditti, an analyst at Vontobel. Still, he “has a background in investment banking -- he doesn’t know only Switzerland. I wouldn’t say that this is a retreat from a global ambition.”\--With assistance from Jan-Henrik Förster, Catherine Bosley and Albertina Torsoli.To contact the reporters on this story: Patrick Winters in Zurich at firstname.lastname@example.org;Nicholas Comfort in Frankfurt at email@example.com;Marion Halftermeyer in Zurich at firstname.lastname@example.orgTo contact the editors responsible for this story: Dale Crofts at email@example.com, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- In ousting Chief Executive Officer Tidjane Thiam, Credit Suisse Group AG is taking only a first step in rehabilitating its battered reputation. A spying scandal, embarrassing revelations on how the bank is run and a public spat at the top of the company have seriously tarnished a 163-year-old Swiss banking franchise whose clients depend on its discretion. The exit of the firm’s first black CEO — despite the objections of several leading shareholders — leaves a huge amount for his successor to repair.It was inevitable that someone at the top would go. The only question was whether it was Thiam or Chairman Urs Rohner. After it emerged that the latter was considering replacing his CEO, three top international investors called for Rohner to leave instead.Given the revelations from the spying scandal — Credit Suisse had its star wealth manager, Iqbal Khan, followed when he agreed to join arch-rival UBS Group AG, a few months after he’d had a public row with Thiam — it was striking that the investors went public to back Thiam unequivocally. The CEO was cleared of direct knowledge of the spying, but more cases of alleged similar behavior gave the impression of a company that was out of control.The investors credited Thiam for turning around the lender. Under his watch, Credit Suisse has shrunk, cut costs and tilted further toward wealth management and Asia, all while retreating from the volatile trading business that burned the bank in the past. While the shares have suffered recently — no doubt in part because of the spying disclosures — a long and painful restructuring is beginning to bear fruit, as financial results next week are expected to show.But Rohner won the day with the board because fears about the damage to the bank’s credibility, in Switzerland especially, outweighed the need to carry on Thiam’s work. “We saw a deterioration in terms of trust, reputation and credibility among all our stakeholders,” Rohner told Bloomberg News on Friday. Switzerland was a particular worry, given that it provides 40% of Credit Suisse’s pretax income.By replacing Thiam with Thomas Gottstein, the first Swiss national to hold the post in almost two decades, the board will hope to rebuild the firm’s reputation. The 20-year company veteran — described by analysts as “very Swiss” and a “safe pair of hands” — has been leading Credit Suisse’s domestic unit. Under his watch, a division once earmarked for a spin-off has increased its contribution to the group’s pretax profit by 30%.Nevertheless, as I’ve argued before, it’s hard to pin all of Credit Suisse’s troubles on one person; serious work is needed to cauterize the wound. The leaks of senior level bust-ups and employee surveillance have filled the pages of local (and international) media in recent months. Gottstein will need time to persuade clients that he is fixing the bank’s corporate culture.The spying debacle exposed weaknesses in Credit Suisse’s governance that regulators are still probing. While Thiam and Rohner say they had no knowledge of the spying operations being carried out by their former chief operating officer, that’s hardly an endorsement of their oversight. “I had no knowledge of the observation of two former colleagues,” Thiam said Friday. “It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place.”His failure to rein in his COO points to a leadership deficiency for which the board also needs to be held accountable.Gottstein’s task is complicated by the unprecedented rupture with key shareholders. On Friday, longtime investor David Herro of Harris Associates called again for Rohner to quit to give Gottstein a proper fresh start. Credit Suisse says Rohner has the board’s full backing to see out his full term, which ends next year.As well as winning around angry shareholders and making sure Thiam’s turnaround remains on course, Gottstein’s success will also hinge on his ability to restore sanity to the firm’s upper ranks. Khan’s departure to UBS, after his falling out with Thiam, was a serious blow, not least because he’s replicating the Credit Suisse playbook of expanding by lending more money to the rich.Credit Suisse shares have underperformed those of its peers under Thiam, but they fell on news of his departure — highlighting the challenge for Gottstein in taking the reins. His predecessor’s abrupt departure won’t be enough by itself.To contact the author of this story: Elisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Credit Suisse's incoming chief executive, Thomas Gottstein, plans to put Switzerland's second-biggest bank on a growth offensive following predecessor Tidjane Thiam's cost-cutting exercise, he told Reuters on Friday. Gottstein, now the head of Credit Suisse's Swiss business, was appointed CEO on Friday after a damaging spying scandal forced out Thiam. The departure, scheduled for Feb. 14, ends a conflict between Chairman Urs Rohner and ex-Prudential boss Thiam after revelations the bank snooped on executives, triggering questions over its culture and management.
A cocktail party bust-up, a Zurich car chase, and a clandestine spying operation at the bank all contributed to Tidjane Thiam's resignation at Credit Suisse.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Credit Suisse Group AG is turning to the first Swiss-born Chief Executive Officer in almost two decades to restore calm in a boardroom shaken by infighting and personal animosities.Thomas Gottstein, who was named Friday to succeed Tidjane Thiam at the helm of the lender, is as Swiss an executive as they come: A 20-year veteran of the bank, with degrees in business administration and accounting from the University of Zurich. He rose through the ranks in a career path that tracked the evolution of Credit Suisse from an investment bank to a firm more focused on wealth management.But his biggest achievement until now was overseeing one of the crown jewels of the lender, the unit known as Swiss Universal Bank. A sort of miniature Credit Suisse focused on the domestic market, it is the biggest contributor to pretax profit and includes a private banking arm as well as investment banking. Initially slated for a partial spinoff to help raise capital, the lender reversed course in 2017 and kept the business.Now Credit Suisse is betting Gottstein, 55, can take his experience running a steady domestic operation onto a global stage. In turning to a homegrown executive who limited experience abroad, but who is well connected with the elites at home, the firm is joining the likes of Deutsche Bank AG in breaking with a series of high-profile international CEO that have, at best, brought mixed results over the past decades.‘Very Swiss’“Gottstein is very Swiss, it’s a big contrast,” said Andreas Venditti, an analyst at Vontobel. Still, he “has a background in investment banking, he doesn’t know only Switzerland. I wouldn’t say that this is a retreat from a global ambition.”Gottstein is taking over after Thiam was ousted in the wake of a tabloid scandal that unnerved the Swiss establishment. The drama started when it emerged that top management hired detectives to follow former executive Iqbal Khan, who was joining rival UBS Group AG. Embarrassing disclosures followed, including accounts of a personal feud and physical altercation between Thiam and Khan and the suicide of a contractor.While Thiam, 57, was cleared in an internal probe and a close lieutenant was blamed, the bank has struggled to move beyond the scandal. Swiss regulators have launched their own inquiry, raising questions about the culture at the top of the firm.Like Credit Suisse Chairman Urs Rohner, Gottstein is a member of the Swiss establishment, sitting on various boards including at regulator Finma, at the Swiss stock exchange and the Zurich Opera House. He’s an excellent golfer, with a handicap of 0.7, and in his youth played soccer for local club FC Zurich.Kronenhalle AltercationPeople who know him describe Gottstein as blunt and very focused on numbers. Last year, as tensions at Credit Suisse were rising in the wake of the spying scandal, Gottstein got into an altercation with an associate of Khan at Zurich’s Kronenhalle, a famous restaurant where the city’s business elite frequently meets, according to people familiar with the matter.Analysts describe the new CEO as a “safe pair of hands” ensuring continuity after the departure of Thiam, who successfully pivoted Credit Suisse from volatile investment banking toward a focus on more stable wealth management.Gottstein joined Credit Suisse’s investment bank in 1999, working on deals including Glencore International Plc’s $10 billion initial public offering. Before returning to Zurich, he spent 13 years as an investment banker in London. He switched to wealth management in 2014 and became head of the Swiss Universal Bank in 2015, the year Thiam joined.”The board came to the conclusion that Thomas was the right person to lead Credit Suisse in the next chapter, given that he has worked in all aspects of banking, private banking, the Swiss bank, and in equity capital markets in London,” Rohner said. “He is the whole package, a very good leader, and a good manager who is well liked by employees and clients.”\--With assistance from Marion Halftermeyer and Albertina Torsoli.To contact the reporters on this story: Catherine Bosley in Zurich at firstname.lastname@example.org;Jan-Henrik Förster in London at email@example.comTo contact the editors responsible for this story: Jan Dahinten at firstname.lastname@example.org, ;Dale Crofts at email@example.com, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.