Credit Suisse Group plans to announce the departure of Chief Executive Thomas Gottstein, The Wall Street Journal reported, part of efforts to turn around the struggling company.
While the timing of Gottstein’s departure couldn’t be determined, an announcement may come as soon as Wednesday, when the Swiss bank is scheduled to release its quarterly financial results, the Journal said, citing people familiar with the bank.
Zurich-based Credit Suisse told investors last month to expect a third straight
A Credit Suisse representative declined to comment.
Gottstein took over in February 2020 after ex-CEO Tidjane Thiam was ousted in the aftermath of a damaging spying scandal. An investment banker who led the Swiss business, Gottstein gained kudos early in his tenure leading the bank through the onset of the COVID-19 pandemic, only to see his reputation tainted by the collapse of $10 billion in supply-chain finance funds linked to Greensill Capital and a $5.5 billion hit related to the implosion of Archegos Capital Management.
Those two scandals saw a huge purge of the top management ranks, as the lender sought to oust executives including investment banking head Brian Chin and risk chief Lara Warner, as well as a slew of bankers at the equities division. Eric Varvel, the long-standing asset management head who was seen as key to developing the Greensill business, also left the bank.
In an effort to stem the tide of bad news, Credit Suisse brought in Portuguese banker Antonio Horta-Osorio as chairman. He vowed to clean up the lender and instill a culture of personal responsibility after the risk lapses. His hands-on approach grated with some executives and saw him take on some responsibilities more typically associated with the CEO, leading to rumors of a tense relationship between him and Gottstein.
Horta-Osorio left earlier this year under a cloud after he admitted to breaking quarantine regulations during COVID-19 and was replaced by Axel Lehmann who, like Gottstein, was seen as more of a Zurich insider and who had previously worked at UBS. Even after his arrival, and Gottstein’s claims of a fresh start, the bank was unable to put the flurry of bad news behind it.
The bank shocked investors in June with yet another profit warning, its sixth in seven quarters, hurt by poor trading performance in volatile markets, clients taking on less risk and a slowdown in capital-markets activity. It has also had to contend with increasing legal expenses as it tackles legacy cases and prepares for potential new ones.
Gottstein has struggled to convince investors that the bank can fulfill ambitious financial targets set last year alongside a strategy revamp that received tepid reception. He started as an investment banker and then went on to run the bank’s Swiss corporate banking and retail banking division, before he was parachuted into running the entire bank.
