CREDIT SUISSE CEO FACES WRATH OF MANAGING DIRECTORS
For the second time in a little more than a week, Thomas Gottstein was facing a tough crowd: His own bankers.
The chief executive officer of Credit Suisse Group AG gathered dozens of managing directors at the global bank on a conference call late Tuesday, as part of crisis-management efforts after the lender announced that it stands to lose as much as $4.7 billion amid the meltdown of hedge fund Archegos Capital Management, Patrick Winters and Jan-Henrik Foerster reported for Bloomberg News late on April 7, 2021.
According to people with knowledge of the call, Gottstein was grilled on the exposure and risk profile of the bank -- and why it lost so much more than rivals in the debacle.
Gottstein could not yet give detailed answers, and instead pointed to the arrival of new chairman Antonio Horta-Osorio later this month as an opportunity to reassess its strategy, the people said.
The 57-year-old Swiss CEO is facing demands for answers from his board of directors and from the star traders, dealmakers, and private bankers who are facing a double whammy.
The shares they were just awarded for last year’s efforts are already down about 20% and the gains of a banner first quarter have been wiped out by the massive hit from Archegos, meaning 2021 may not bring richer rewards.
A spokesperson for the bank declined to comment on the call. That leaves Gottstein, who has pledged a “clean slate” after scandals under his predecessor, wedged between disgruntled staff and his own bosses who are increasingly taking charge.
It was the board of directors who made the decision to replace Chief Risk Officer Lara Warner and investment bank chief Brian Chin, not Gottstein, according to a separate person familiar with the matter. The board is pushing for a review of the bank’s wider strategy, not just the units that have run into trouble, the people said.