By Duncan Mavin And John Letzing
As Tidjane Thiam struggled to keep alive a $35.5 billion
takeover deal in June 2010, he reflected on whether the transaction
was too early, coming just a few months into his stewardship of
U.K. insurer Prudential PLC.
"In life you can't always choose when those opportunities come,"
Mr. Thiam told The Wall Street Journal in an interview at the
time.
On Tuesday, opportunity again came the way of the 52-year-old
executive from the Ivory Coast who was unveiled as the new chief
executive of Swiss bank Credit Suisse Group AG.
He has steered Prudential to strong growth over the past 5 1/2
years and has an impressive track record that underscores both his
ambition and capabilities. Mr. Thiam's varied career includes
stints as a globe-trotting management consultant, a top insurance
executive and a role in Ivory Coast's government, until he left
after a coup.
But he has no experience running a bank, and in some ways Mr.
Thiam seems an odd fit for Switzerland's sometimes stuffy corporate
culture.
"It's an interesting [curriculum vitae] for someone taking over
a large international bank, having never worked at one," said
Vontobel analyst Andreas Venditti.
Mr. Thiam, who was the first black CEO of a major U.K. company,
now becomes one of the most high-profile African executives in
global business. He will assume control at Credit Suisse once the
current CEO, American Brady Dougan, steps down in June after eight
years in charge. Amid Credit Suisse's underwhelming financial
performance in recent years, the bank's board made the decision to
replace Mr. Dougan, a career investment banker, with Mr. Thiam more
than two months ago, but managed to keep the move under wraps,
according to a person familiar with the matter.
Board members agreed that despite Mr. Thiam having no track
record in banking, his extensive international experience and
contacts, and his successful tenure at Prudential, made him a solid
choice, according to people familiar with the matter.
Mr. Thiam, speaking on a conference call to discuss Prudential's
full-year earnings Tuesday, declined to comment on his new
appointment. Referring to his time at Prudential, he said the job
of a CEO is to build strong teams and deliver consistent
results.
Mr. Thiam will inherit a bank that is challenged on several
fronts. Its share price has stagnated in recent years. Mr. Dougan's
management team has been seen as slow to adapt to changes roiling
investment banking. And a reboot of the core private-banking
business is under way after several scandals.
Credit Suisse also faces a recent abrupt rise in the value of
the Swiss franc that eats into profits generated abroad and looming
new regulations that could make it tougher to post decent
returns.
Mr. Dougan's legacy will be mixed. He shepherded the bank safely
through the financial crisis, but the bank was also forced to
address questions about its role in helping Americans evade taxes,
leading to a $2.6 billion settlement and a criminal plea of guilty
for the bank in 2014.
In Zurich on Tuesday, Credit Suisse's shares rose 7.8%, to 25
francs ($25.36). In London, Prudential's stock fell 3.1%, to 1,612
pence ($24.39).
Mr. Thiam is the son of a diplomat who studied at a prestigious
French university. In addition to French and English, he also
speaks German, the local language in Zurich.
He brings a starkly unique résumé to the job. After finishing
school, Mr. Thiam went to work for consultant McKinsey & Co. in
Paris and New York. In the 1990s, he became a government official
in his home country. He was traveling in 1999 during a military
coup but returned home and was put under house arrest for several
weeks. The new military government offered him a job, which he
turned down.
In an interview with BBC Radio in 2012, he said of the coup, "If
you have been in a situation where you have nothing, there is
nothing much you are afraid of." Mr. Thiam, a soccer fan who
sometimes cycles to work, also discussed his fondness for West
African music and said Bob Marley's "Redemption Song" was one of
his favorite pieces of music.
He joined U.K. insurer Aviva PLC in 2002. He quickly gained
admirers for his direct approach. He was appointed chief financial
officer, before leaving the company in 2008.
In 2009, he joined Aviva rival Prudential, the scene of his
planned takeover of AIA Group Ltd., the Asian unit of American
International Group Inc.
The deal was bold, but it ultimately led to a humbling
experience for Mr. Thiam. Shareholders balked at the cost of his
plans and killed the bid. Later, Prudential was hit with a big fine
by U.K. regulators, and Mr. Thiam was personally censured for
failing to inform them of the AIA takeover plans.
For Mr. Thiam, the failed takeover could have sent his career
spiraling downward. Instead, AIA's subsequent strong performance
vindicated his plans, analysts said, and Prudential also went on to
deliver growth based in large part on expansion in emerging Asian
markets.
Mr. Thiam may bring a taste for deal making to his new job.
Al Alevizakos, an analyst with Keefe, Bruyette & Woods, said
an appetite for acquisitions might help Credit Suisse bolster its
private-banking business.
Mr. Thiam's appointment also may be a sign that Credit Suisse
will make more significant cuts to its investment bank, he said,
because as an outsider Mr. Thiam has no allegiance to the unit.
"I'd be surprised now if they didn't put the knife into the
bone," Mr. Alevizakos said.
Pressure to shrink the investment bank comes as Swiss officials
are expected to implement new, tougher capital requirements to
better protect the country's broader economy.
Mr. Thiam will face a surfeit of challenges, including a
lackluster share price. Credit Suisse's shares have risen about 5%
over the past three years, while Swiss rival UBS AG is up nearly
40% over the same period.
Credit Suisse has been unable to rely on its private-banking
business to prop up its profitability. The lender's U.S.
private-banking unit has struggled in recent years, and it has had
to streamline the global business by exiting some markets.
The franc, which was abruptly allowed to gain in value thanks to
a January decision by the Swiss National Bank, is also crimping
profits. Like other Swiss banks, Credit Suisse reports the bulk of
its costs and earnings in francs, but derives much of its income in
now-weaker dollars and euros.
Last month, Credit Suisse said it would cut hundreds of millions
of francs in costs, in a bid to grapple with the stronger
currency.
Still, Mr. Thiam's appointment is likely to further solidify the
bank's international image. As of the end of 2013, only 16% of its
institutional investors were located in Switzerland, while nearly
half were in the U.S. He has worked in New York, Paris and London,
and has led Prudential's expansion into emerging markets,
especially in Asia.
Anuj Gangahar contributed to this article.
Write to Duncan Mavin at duncan.mavin@wsj.com and John Letzing
at john.letzing@wsj.com
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