Horta-Osório tightens control of Credit Suisse

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Credit Suisse Group Update

The new chairman of Credit Suisse, Antonio Horta-Osorio, has assumed more administrative duties at the Swiss bank. Insiders call this a power grab and weaken the authority of CEO Thomas Gottstein.

Former Lloyd Bank Group CEO Horta Osorio joined the Swiss bank’s chairman in April and immediately Consequences of the double crisis Involving family office Archegos Capital and professional financial company Greensill Capital.

During his first 134 days in office, the Portuguese-British banker-knighted in June for reinvigorating Lloyd’s role after the financial crisis-by placing close allies on the board of directors and executive team , Established its own authority in Credit Suisse. According to people familiar with the matter, he also greatly expanded his office and directly participated in decision-making when trying to repair a bank that was hit by the scandal.

These moves triggered discussions among the bank’s executives about the CEO position of Gottstein. It also sparked growing rumors in Zurich that Horta Osorio intends to take over as CEO, which other senior officials at the bank completely denied.

“Currently [Horta-Osório] Is trying to guide and guide him,” said a person who understands their relationship.

“People believe that Thomas was put into it without background or training, maybe he can complete this work under the guidance. There is a desire to give him a chance, but there is no guarantee that it will succeed.”

According to several people familiar with the matter, the core of these changes is the introduction of a “tactical crisis committee,” which is designed to deal with the consequences of the Archegos and Greensill scandals, but now serves as the bank’s “nerve center.” How it works.

TCC, as known internally, is composed of Horta-Osório, Richard Meddings, Chairman of the Audit and Risk Committee of the Board of Directors, and Christian Gellerstad, Chairman of the Conduct and Financial Crime Control Committee of the Board of Directors.

“The three meet Thomas [Gottstein] And David [Mathers, chief financial officer] Be with other executives often,” said one person involved in the process. “Antonio gave orders to Thomas at these meetings. This is his decision. “

TCC predates the arrival of Horta-Osório and was established in accordance with an agreement with Finma, the Swiss regulatory agency, as a countermeasure The Archegos and Greensill scandal.

Since Horta-Osório joined, it has also been responsible for overseeing the review of the group’s risk management and strategy. Just in August, it held a meeting every week, but now it holds a meeting every two weeks.

At least two top Credit Suisse investors said they support Horta-Osório’s tightening of controls.

A Swiss banking executive who is close to Horta Osorio said that his next focus will be on revitalizing the executive team.

“One of the problems with Credit Suisse in recent years is that people at the board level do not have real banking capabilities,” he said. “Antonio solved the problem immediately, and now he is considering the management-they don’t have extensive experience in the banking industry.”

In July, Credit Suisse issued a report on its handling written by law firm Paul Weiss. Archegos crashesIt clarified in unbearable details the failure that led to the bank’s $5.5 billion trading loss, the largest trading loss in its 165-year history.

TCC is monitoring a similar investigation into the relationship with Greensill, which has led to the liquidation of a $10 billion investment fund.

Most of the work is in the investigation found many of the same problems exposed in the Archegos report, including loose business relationships with customers and a loose risk management culture.

The survey results are expected to be announced in the lender’s third quarter results on November 4, even though the full report is not expected to be released.

Credit Suisse declined to comment.

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