Credit Suisse Group (CS) - Get Report shares traded sharply lower Friday trading following the shock resignation of CEO Tidjane Thiam, who abruptly left the Swiss lender following a spying scandal and a boardroom struggle with chairman Urs Rohner.
Thiam was cleared by an internal probe last year linked to allegations that one his closest allies at the bank had hired a private investigator to spy on a senior official who had recently been hired by cross-town rival UBS Group AG (UBS) - Get Report.
The investigation found that chief operating officer Pierre-Olivier Bouee acted alone in ordering the surveillance of Iqbal Khan, the co-head of the bank's profitable wealth management arm, but tensions echoing from the scandal, which shocked the nation's banking elite and dominated the mainstream media, continued to linger between Thiam and Rohner.
“I will be an enthusiastic supporter of my colleagues, as they continue to build momentum in the business. I want to extend my heartfelt thanks to all at Credit Suisse for their support in my work. I will be forever grateful,” Thiam said in a statement. “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.”
Credit Suisse shares were marked 3.8% lower in Zurich trading to change hands at Sfr12.30 each, trimming their six-month gain to around 11.3%.
Thiam, who will step down from the bank after presenting fourth quarter and full year results next week, will be replaced by Swiss banking veteran Thomas Gottstein.
“Based on his deep and comprehensive experience in our business and in view of his impressive performance as head of our Swiss bank and his respect amongst our clients and employees," chairman Rohner said, "Thomas Gottstein is excellently positioned to lead Credit Suisse into the future. We are happy to announce him as a strong internal successor to our current leadership. I am grateful to him for taking on this responsibility and look forward to working with him in his new role.”
The revelation that Credit Suisse was comfortable hiring private investigators to monitor employees -- an action that legal sources have suggested is not unusual in the hyper-competitive market for financial services in Switzerland -- kept the bank in the mainstream media news cycle and overshadowed efforts to Thiam's multi-year turnaround plans.
Khan, who confronted at least one of the investigators tailing him in the Zurich city center, was allegedly being spied upon to ensure that he would not attempt to bring Credit Suisse clients with him when he started with UBS later in the year.
The scandal deepened, however, when a contractor who worked on hiring the private investigation team following Khan committed suicide earlier this week, taking the story from the financial section to the front pages of the country's tabloid newspapers.