TO HIS family in Africa, he was “l’ultime espoir” – the last hope. Tidjane Thiam, it is safe to say, did not disappoint. Over the past 30 years, Thiam has traced the arc of ambition from his native Ivory Coast to the top of a venerable British insurer, Prudential, sweeping aside the last racial barrier in UK boardrooms.
But for all his success as the top man from the Pru, few would have pegged Thiam as a future Gnome of Zurich. His appointment on Tuesday as the next chief executive of Credit Suisse Group will place a man with no experience of running an investment bank atop one of the world’s largest financial companies.
Born in Ivory Coast, raised in Morocco and educated in France, at the elite Ecole Polytechnique, the francophone Thiam has spent a lifetime defying the odds. By his mid-20s, he was working in Paris for McKinsey, the high temple of consulting. By his mid-30s, he was back in Ivory Coast – and under house arrest, following a military coup. By his late-40s, he was in Britain, as the first black executive of a FTSE-100 company.
Experience
Now, at 52, Thiam is moving on to Credit Suisse, a bank many see as adrift. Stockholders are betting he can put this Swiss house in order: the share price rose almost 8 percent on Tuesday on news of his appointment. The hope is that Thiam will placate regulators and set the company on a new path to growth by shifting away from investment banking and trading in favour of wealth management.
Thiam played down his lack of direct experience running an in investment bank on Tuesday.
“If you talk about investment banking, Prudential has an $800 billion (R9.7 trillion) balance sheet, and we deal with exactly the same issues, whether it’s interest rates or markets,” he said.
Thiam’s story is, in broad outlines, not unlike that of Barack Obama, with whom he maintains a working relationship. Indeed, the Obama administration once tried to recruit Thiam to run an arm of the World Bank, and the president has recently consulted him about the Ebola outbreak in West Africa.
In staid Switzerland, that sort of cache could help set Thiam apart, said Michael Hermann, a senior lecturer in political science at the University of Zurich. “It’s a bit of the Obama-factor.”
Tidjane Thiam stands out in sharp relief to Brady Dougan, who has run Credit Suisse since 2007. Unlike Thiam, Dougan is a product of Wall Street trading floors. While Dougan guided Credit Suisse through the financial crisis, he has been criticised for the bank’s role in helping Americans evade taxes, a scandal that has cost Credit Suisse billions, as well for the size of his bonuses. To the irritation of some in Switzerland, Dougan never quite mastered German.
In Zurich on Tuesday, Thiam opened a press conference in German, apologising that he was a bit rusty. He then switched to French. Then to English.
“I don’t know an organisation that doesn’t need change,” Thiam said. “There are things that will need to be improved.”
Thiam was first pitched the job at Credit Suisse by chairman Urs Rohner in the second half of 2014, and spent months weighing whether to take the position.
Thiam recounted his rise to the top in a 2010 interview with BBC Radio 4. He was born in Abidjan, the financial capital of Ivory Coast, one of seven children. His mother, Marietou, was the niece of Felix Houphouet-Boigny, who ruled Ivory Coast for three decades after its independence from France.
His father, Amadou Thiam, a former journalist and minister for information, was imprisoned in the 1960s for allegedly plotting to overthrow the government. He was released, and in 1966 became the country’s ambassador to Morocco, when Thiam was four.
A top student, the young Thiam won entry to prestigious universities in Paris, which traditionally gave scholarships to bright young minds from former colonies. He studied chemical engineering and then, in 1986, took a job at McKinsey as a management consultant.
In 1994, he turned down a job offer at Goldman Sachs to return to Ivory Coast. Henri Konan Bedie, then president, had asked him to run infrastructure projects, according to the BBC interview. Five years later, Bedie was overthrown in a military coup – and Thiam found himself under house arrest.
“The coup was a result of tensions, inequalities,” Thiam said yesterday
“I learnt one thing – one should never work for a poor leader, in the end it doesn’t work. I was very young and naive back then,” he said.
Thiam left the country in 2000, and returned to McKinsey in Paris, before taking up a job at British insurer Aviva in 2002. He climbed the ranks to become chief executive of the company’s European unit and an executive director on the board.
Hostile bid
Richard Harvey, who stepped down as Aviva chief executive after leading a failed hostile bid for Prudential in March 2006, persuaded Thiam to defect to the company he could not acquire.
Thiam joined Prudential as chief financial officer in 2008. He replaced Mark Tucker as chief executive in March 2009 after insurers had been battered during the financial crisis amid speculation they did not have enough capital to meet their liabilities.
Less than a year into the job, with Asia’s rising middle class firmly in his sights, Thiam made a $35.5 billion offer for American International Group’s Asian operation, AIA Group.
The deal failed after Prudential shareholders balked at the price, and British regulators censured Thiam for not telling them sooner about his plans. He had to apologise to investors for the money spent on the failed transaction.
Thiam rebounded from that setback as growing sales in Asia boosted profit and helped to triple Prudential’s share price. His departure wiped £1.3bn (R23.9bn) off the insurer’s market value yesterday.
At Credit Suisse, Thiam must rebuild the bank’s capital buffers, eroded by the cost of settling pricey litigation, and give investors a clear plan for restructuring its investment bank to expand in the more profitable money-management business.
“One of the major challenges facing Thiam is Credit Suisse’s unclear business model,” said Guy de Blonay, who manages about £462 million in the Financial Opportunities Fund at Jupiter Fund Management.
“Is it an investment bank or a private bank?” – Bloomberg