By John Letzing
ZURICH-- Credit Suisse Group AG sought to usher in a new era on
Tuesday, as the Swiss lender replaced its longtime CEO with an
insurance executive who brings extensive international
experience--but none running a bank.
Brady Dougan, 55, will depart Credit Suisse at the end of June
and be replaced by Tidjane Thiam, the CEO of U.K.-based insurer
Prudential PLC, the Zurich-based bank said. Mr. Dougan's departure
was previously reported on Monday by The Wall Street Journal and
other publications.
An American who was appointed CEO of Credit Suisse in 2007, Mr.
Dougan was long considered a survivor and had been one of just
three CEOs to endure at big, global banks throughout the financial
crisis and its aftermath.
However, legal and regulatory challenges generated in part by
the crisis mounted for Credit Suisse during Mr. Dougan's tenure. In
addition, the bank's core, traditional business of private banking
has been forced through a significant overhaul as its profitability
has suffered.
Meanwhile, maintaining a significant investment banking unit has
exposed Credit Suisse to volatility in its financial results and
pressure from increasingly stringent capital requirements. The bank
has been compelled to withdraw in a piecemeal way from some smaller
investment-banking businesses, where it found it could no longer
compete.
Credit Suisse's share price has lately lagged behind that of
Swiss rival UBS AG, which has sharply curtailed its investment bank
while focusing on its private-banking business. However, investors
appeared to welcome the news of leadership change at Credit Suisse,
with the bank's shares indicated to open 3.1% higher in Zurich on
Tuesday morning.
"Now is the right time for the organization and for me to
transition out of the CEO role," Mr. Dougan, who built his résumé
at Credit Suisse in investment banking, said in a statement. He
added that he has "tremendous respect" for Mr. Thiam.
Mr. Thiam, a 52-year-old born in Ivory Coast, was the first
black executive to run a major U.K. firm. He also had a significant
political career in his home country, where he became a member of
the government before a 1999 coup.
In addition to his political background, Mr. Thiam is somewhat
unique as a former McKinsey & Co. consultant who takes over the
top job at a global bank without having experience running a bank.
Morgan Stanley CEO James Gorman worked as a McKinsey consultant
before joining Merrill Lynch in an executive role, and then moving
on to Morgan Stanley.
However, in addition to a wealth of international experience,
Mr. Thiam may bring a dash of bold deal making to his new job.
While at Prudential in 2010, the year after he became CEO, Mr.
Thiam made an eye-opening bid to buy AIA Group Ltd., the Asian unit
of American International Group Inc., for roughly $36 billion.
Prudential shareholders fought the deal, and Mr. Thiam was forced
to withdraw it.
Before joining Prudential, which confirmed Mr. Thiam's departure
alongside full-year results Tuesday, the executive worked at U.K.
insurer Aviva PLC.
Credit Suisse said Tuesday that its board members considered
both internal and external candidates for the CEO job. Chairman Urs
Rohner said in a statement that Mr. Thiam's international
experience, including "the development of new markets," made him a
solid choice for the role.
Mr. Dougan, who has maintained close ties to the U.S. throughout
his tenure and never said more than a few words in German in
public, was often perceived as an outsider in Switzerland.
Many in the Alpine country see the bank, which was founded in
1856 to help foster Switzerland's industrial development, as a
national treasure. But in recent decades, Credit Suisse has
developed sprawling, international operations and significant
businesses in the U.S. and Asia. As of the end of 2013, only 16% of
its institutional investors were located in Switzerland, while
nearly half were in the U.S.
Mr. Thiam speaks German, the local language in Zurich, in
addition to English and French, Credit Suisse said.
One challenge likely to be faced soon by Mr. Thiam is a stronger
Swiss franc, which was abruptly allowed to gain value because of a
J anuary decision by the Swiss National Bank . Like other Swiss
banks, Credit Suisse reports much of its costs in francs, but
derives much of its income in dollars and euros.
Last month, Credit Suisse said it would cut hundreds of millions
of francs in costs, in a bid to grapple with the strong franc.
Write to John Letzing at john.letzing@wsj.com
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