Zurich/London/Hong Kong - Credit Suisse has swooped on Prudential boss Tidjane Thiam to lead the Swiss bank in a push to manage more of the wealth held by Asia's fast growing club of multi-millionaires.
Thiam, a 52-year-old former Ivory Coast government minister, will replace American chief executive Brady Dougan, who has drawn fire for failing to reform the bank and scale back its risky investment banking business fast enough.
In a sign of Thiam's standing with investors, news of his move added almost $3 billion to Credit Suisse's market value on Tuesday and cut Prudential's by nearly $2 billion.
As Prudential boss - and the first black head of a FTSE 100 company - Thiam has built up a strong Asian track record, expanding the British-based insurer's sales in the region since 2009 and trebling its share price in the process.
While Thiam has never run a bank, shareholders and analysts regard his experience in dealing with financial regulators as a strength while lenders must implement a blitz of new rules imposed following the global financial crisis.
Dougan, 55, had been criticised for not paring back Credit Suisse's investment bank enough after the introduction of global regulations forcing banks to hold more capital so that they could survive another crisis.
Chairman Urs Rohner said the bank would press on with its current strategy under Thiam, a multi-linguist whose private interests range from soccer to Russian literature.
“As you know, we have a strategy of growing the wealth management business,” Rohner said, adding that he wanted a more balanced allocation of the bank's capital between the wealth management and the investment banking businesses. “It is not about a fundamental redirection,” he told a news conference.
Thiam was guarded on his plans. “Credit Suisse has been successful but I don't know an organisation that doesn't need change,” he said. “There are things that need to be improved. I'm not in a position to go any further in the answer.”
Credit Suisse's shares closed up 7.76 percent, adding $2.93 billion to its market value, while Prudential's lost 3.1 percent, wiping $1.99 billion from its capitalisation.
He was hailed as a star by the Swiss media, with tabloid Blick dubbing him the “Obama of Credit Suisse” whose appointment was a sign of Switzerland's openness to the world.
Tages Anzeiger said Thiam might be much better suited to lead Credit Suisse than Dougan, an outsider in Switzerland whose departure was “long overdue”.
Under Dougan, Credit Suisse survived the crisis without resorting to a taxpayer-funded bailout. But he faced calls to quit last year when the bank reached a $2.5 billion settlement with US authorities for helping Americans to evade taxes via secret bank accounts.
He will leave at the end of June after 25 years at the bank and eight as CEO, when he was one of the world's highest-paid bankers with his salary topping 90 million Swiss francs ($91 million) in one year. More recently, he had embarked on several rounds of cost-cutting.
“Thiam has no banking experience but it could be that an outsider can make some of the decisions they were not able to make internally,” said one investor in Credit Suisse, who asked not to be named.
Thiam left Ivory Coast in his early 30s following a coup and joined consulting firm McKinsey & Company in Paris - making him now the third ex-McKinsey member on Credit Suisse's 10-strong executive board. People who have worked with him said he has a sharp intellect and deals well with regulators and colleagues.
While at Prudential, Thiam failed in an attempt to take over Asian-focused insurer AIA in 2010 after a shareholder rebellion. Nevertheless, he successfully concentrated on Asia to drive profits.
His recruitment raises expectations that he will cut Credit Suisse's investment bank hard at last. Its European rivals such as UBS have been faster to shrink this business and focus on other areas of strength.
“Thiam's background in insurance and asset management suggests Credit Suisse's focus is moving increasingly away from investment banking,” said a UK-based fund manager, who was reviewing his position after selling the bank's shares on concerns about capital requirements.
Building bridges
Dougan's departure leaves JP Morgan's Jamie Dimon and Goldman Sachs' Lloyd Blankfein as the only two global banking CEOs still in place since the 2008-09 crisis.
The Credit Suisse board backed Dougan over the US settlement, under which the bank pleaded guilty to criminal charges but kept its New York licence. However, he was criticised by some politicians and media in Switzerland.
Thiam has the languages to help build bridges with Swiss politicians wary of bankers after having to bail out UBS. He addressed his first Credit Suisse news conference in German and French as well as English.
A fan of English football club Arsenal, he lists “The Brothers Karamazov” by 19th century Russian novelist Fyodor Dostoyevsky as his favourite book and his top song is Tadieu Bone by Ismael Lo, a guitarist from Senegal, his father's country.
Asked on a BBC radio show two years ago how he felt leading people, Thiam said: “It's a bit like walking a tightrope because you feel all these expectations around you and it's rarely comfortable. If you really believe in what it is you are trying to achieve it helps you go through a journey and walk without looking down.”
Prudential, Britain's largest insurer by market value, confirmed Thiam's departure as it reported a 14 percent rise in operating profit in 2014.
The firm said a successor has been identified and would be announced after the regulatory approval process. Thiam is expected to remain in place until after first quarter results are released in May. The insurance group declined to comment on media reports that its U.S. business head Mike Wells would get the job.
Reuters