Thiam tells investors he leaves with 'clear conscience' after
spy scandal cost him job
By Margot Patrick
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 14, 2020).
Credit Suisse Group AG's departing chief executive, Tidjane
Thiam, said bumper 2019 earnings validate his strategic push into
wealth management four years ago, and that he is leaving with a
"clear conscience" after being forced to resign last week over a
Mr. Thiam spent his final day at Credit Suisse presenting its
best financial results in nine years. The bank said 2019 net profit
rose to 3.4 billion Swiss francs ($3.48 billion), up from 2.06
billion francs in 2018, as gains in its wealth management and
markets businesses offset a decline in corporate advisory
Mr. Thiam said the results showed the strategy he unveiled in
October 2015 is working. "The mix and quality of our earnings four
years later is much better and more stable," he said. After joining
as CEO in July 2015, Mr. Thiam re-centered the bank around serving
the global rich, culling its more-volatile markets business that at
the time made up just over half its assets. That business now
accounts for 28% of assets.
His tenure initially was marked by losses -- from 2015 through
2017 -- due to restructuring costs, legal settlements and U.S.
corporate tax changes. Net profit in 2019 was the best since 2010,
when the bank made 5.1 billion francs.
"It's a great way for the company to say goodbye to me," he said
on a call with analysts.
Mr. Thiam was ousted at a board meeting a week ago for failing
to contain reputational fallout from the surveillance of two Credit
Suisse executives last year. He has said he didn't know about the
surveillance before it became public and regretted it happened.
On Thursday, Mr. Thiam said he had to be "a stickler for the
rules" and remain silent while the bank, an outside law firm and
the Swiss financial regulator all investigated aspects of the
"I was never going to intervene or be seen as intervening," he
The bank's chairman, Urs Rohner, said on Friday the board
unanimously decided new leadership was needed to resolve the
deterioration in trust and credibility with customers since the
executive surveillance came to light.
Mr. Thiam said a decision in January to post a rebuttal to a
Swiss press report on a personal Instagram account was reached with
the bank's corporate communications department, and that they
reviewed all his posts. The Wall Street Journal previously reported
that some board members were unhappy with the apparent effort to
bolster his position through Instagram posts while they considered
whether he should stay in the job.
"I don't know how to post on Instagram," Mr. Thiam said. It was
"a collaboration with the company," and communications staff
uploaded the posts, he said.
The spying scandal began in September when the bank's former
international wealth management head, Iqbal Khan, spotted and
confronted an investigator following him in Zurich. Mr. Khan was
due to start at rival UBS Group AG the next month. An outside law
firm hired by the Credit Suisse board found no evidence Mr. Thiam
knew about the surveillance, and that it had been ordered by the
bank's chief operating officer to protect the bank's interests. The
COO resigned and hasn't commented.
Then, in December, a Swiss newspaper published details and
photos of the surveillance of a second executive. The law firm
investigated and again found the COO had ordered it without Mr.
The second incident triggered a regulatory investigation in
Switzerland and led to the board losing confidence in Mr. Thiam's
leadership to stem the crisis. Mr. Rohner said Friday he believed
Mr. Thiam when he said he didn't know about the surveillance. "The
issue was the fallout," Mr. Rohner said.
Mr. Thiam said he is looking forward to getting some rest now
before figuring out what he will do next, and advised his
replacement, Thomas Gottstein, not to have "too much pride" to
change tack when circumstances change. Shortly after Mr. Thiam set
out his 2015 strategy, markets sank, forcing a rethink around
elements of the plans.
"What matters in the end is to be right and to do the right
thing for the company," he said. Mr. Gottstein, formerly head of
Credit Suisse's Swiss arm, starts as CEO Friday. He said the bank
will stick to its current strategy and financial targets.
The bank said net profit more than doubled in the fourth quarter
to 852 million Swiss francs compared with 259 million francs a year
earlier. Analysts had forecast a quarterly net profit of 968
million francs on revenue of 5.57 billion francs, according to a
consensus forecast provided by the bank.
In its core wealth management activities, Credit Suisse said
fourth-quarter revenue grew by 8% after stripping out one-off gains
Revenue in its global markets division rose 36% to 1.3 billion
francs in the fourth quarter as clients poured money into bond
markets and made other fixed income-related trades.
Its investment bank, advising on company fundraisings and
mergers and acquisitions, had a tougher quarter amid a lull in
M&A deals, with a 60 million franc pretax loss compared with a
105 million franc pretax profit in the fourth quarter of 2018.
Credit Suisse said all its divisions had a strong start in 2020
despite geopolitical uncertainties and concerns about potential
economic effects from the spreading coronavirus.
--Pietro Lombardi in Barcelona contributed to this article.
Write to Margot Patrick at email@example.com
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February 14, 2020 02:47 ET (07:47 GMT)
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