That didn’t take long.
In less than a year, Credit Suisse Chairman António Horta-Osório has gone from new hire to freshly fired, as the Swiss megabank has decided to sack its chairman of the board, effective immediately. Horta-Osório was fired due to “COVID-related” violations, including a trip to Wimbledon last year which purportedly violated company quarantine rules. We must admit – this seems like a pretty lame excuse to fire a board chairman, especially considering that Horta-Osório didn’t even take over until after the twin scandals of Archegos and Greensill that made 2021 a historically bad year for Credit Suisse.
Hopefully, as one banking analyst suggested, Horta-Osório may ultimately become a “footnote” in Credit Suisse’s long, storied history. But the bank’s reputation is still very much in the recovery stage, since nearly €10 billion in losses takes a long time to truly forget.
The biggest problem now is that the bank doesn’t have much of a bench when it comes to its next generation of leaders.
Andrew Coombs, a banking analyst at Citigroup, said: “[Horta-Osório] will go down as a short footnote in Credit Suisse’s long history,” but added that “his departure leaves Credit Suisse with a lack of strong characters at the top and leadership questions will likely be raised.”
Unfortunately for Horta-Osório, the bank determined that his behavior warranted a board investigation, which found that the 57-year-old broke the quarantine rules, including on a trip to London last year to watch the Wimbledon tennis finals, and on other occasions as well. The former Lloyds Banking Group CEO was also cited for an incident where he used the bank’s private jet for a personal holiday to the Maldives, according to a person with knowledge of the investigation’s findings.
The 57-year-old chairman held most of his talks with the board about his decision to resign after just 8 months over the weekend, meaning this decision is still very fresh.
“I regret that a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally,” Horta-Osório said. “I therefore believe that my resignation is in the interest of the bank and its stakeholders at this crucial time.”
According to the FT, Horta-Osório’s abrupt departure is “a severe embarrassment for Credit Suisse, which recruited the Portuguese banker to help reset its strategy after scandals involving Greensill Capital and family office Archegos damaged the bank’s reputation for risk management”.
For its next chairman, the bank has decided to elevate Axel Lehmann, the former chief operating officer and head of the Swiss business at UBS, Credit Suisse’s crosstown rival, has already been hired as the bank’s new chair, Credit Suisse said. He previously joined the bank’s board in October.
While Lehmann told Reuters that the bank’s “strategic focus” on asset management won’t change with him leading the board, JPM analyst Kian Abouhossein reiterated his underweight rating on the news, saying the bank’s lingering issues will lead to ongoing regulatory scrutiny and risk aversion, hurting profits even as interest rates are expected to rise.
Lehmann said he plans to stick with the new strategy adopted by the bank’s leadership in the wake of the Greensill and Archegos blowups. He also told the FT that “we are in a constant dialogue with shareholders.”