Credit Suisse CEO Tidjane Thiam resigns after spying scandal

The board of directors unanimously accepted Thiam’s resignation at a meeting on Thursday, appointing Credit Suisse (CS) veteran Thomas Gottstein as the new CEO, the Swiss investment bank said in a statement Friday.

Last year, Credit Suisse’s ex-chief operating officer, Pierre-Olivier Bouée, was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had defected to crosstown rival UBS and Bouée reportedly feared that he might try to poach Credit Suisse employees and clients. The bank said he had ordered the surveillance to protect its interests.

Bouée stepped down after that operation came to light. More recently, he was blamed for ordering a spying operation on Credit Suisse’s former head of human resources for several days last February. CNN Business has attempted to contact Bouée for comment.

“I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place,” Thiam said in the statement.

Thiam will step down following the presentation of 2019’s fourth quarter and annual results next week.

Credit Suisse said previously that former COO Bouée had not informed Thiam or any other member of the bank’s senior leadership of the surveillance on Khan. It added in December that it found no indication that Thiam and other members of the executive board or board of directors knew anything about the second spying case until the media reported on it.

Bouée and Thiam worked closely together for nearly two decades at various firms before joining the Swiss bank, according to their Credit Suisse biographies. The pair were at McKinsey in Paris between 2000 and 2002. Bouée followed Thiam to British insurer Aviv in 2004. They both joined Prudential, another British insurer, in 2008 before heading to Credit Suisse in 2015.

Shares in Credit Suisse lost as much as 5% in Zurich on Friday, before trading about 2.5% lower. The stock has fallen 46% since Thiam became CEO, reflecting a challenging period for European banks, which have had to contend with falling investment banking revenue and the impact of record low interest rates on lending margins. Shares in major rival UBS (UBS) have dropped about 40% over the same period.

Thiam was a surprising choice to lead the bank. He had no direct investment banking experience and was an outsider to the closeted world of Swiss finance. At the time, Credit Suisse Chairman Urs Rohner cited his experience in wealth management, which has become a much bigger focus for European banks as they tried to offset the investment banking decline and the impact of negative rates.

Under Thiam, Credit Suisse implemented a three-year drive to focus on managing the assets of wealthy clients, scale back investment banking and restructure its global markets business. Analysts say the bank still needs to do more to shift its resources away from investment banking in New York and London to wealth management in Asia.

Credit Suisse posted a $3 billion loss in its 2015 financial year. Those losses narrowed in Thiam’s first years in charge before the bank returned to profit in 2018. On Friday, Rohner credited Thiam with returning the bank to profit and placing it “on a very solid foundation.”

Still, Credit Suisse has now handed the reigns back to an insider. Gottstein has been with the bank for more than two decades and has worked in the industry for more than 30 years. He has been responsible for the bank’s Swiss business since 2015, Credit Suisse said.

In Friday’s statement, the bank’s lead independent director Severin Schwan said Rohner had led the board “commendably during this turbulent time.”

“After careful deliberations, the Board has been unanimous in its actions, as well as in reaffirming its full support for the chairman to complete his term until April 2021,” Schwan added.