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SINGAPORE: Credit Suisse Chairman Antonio Horta-Osorio has resigned following an internal investigation into his personal conduct, including breaches of COVID-19 rules, raising questions about the embattled lender’s new strategy as tries to recover from a series of scandals.
It comes less than a year after Horta-Osorio was hired to help the bank deal with the implosion of collapsed investment firm Archegos and the insolvency of UK blockchain finance company Greenshill Capital sourcing, even as it was still reeling from the 2020 exit of CEO Tidjane. Thiam on a spy scandal.
Combined, these triggered multibillion-dollar losses and layoffs at Switzerland’s second-largest bank, and Horta-Osorio unveiled a new strategy in November to rein in its investment bankers and curb a freewheeling culture.
However, Horta-Osorio’s personal conduct has recently come under scrutiny, with reports that he broke COVID-19 quarantine rules.
“I regret that a number of my personal actions have caused hardship for the bank and compromised my ability to represent the bank internally and externally,” Horta-Osorio said in a statement released Monday by Credit Suisse.
“So I think my resignation is in the interest of the bank and its stakeholders at this crucial time,” added Horta-Osorio, the former CEO of Lloyds.
Credit Suisse said Horta-Osorio resigned following a board-ordered investigation and board member Axel Lehmann became its chairman effective immediately.
“It’s been in the ‘damaged property’ section for a while now. While Horta was responsible for the new strategy, his short tenure means the overhaul will likely only be in its infancy,” said said Justin Tang, head of Asia. research at investment adviser United First Partners in Singapore.
“The irony is that Horta was hired to repair damage to Credit Suisse’s reputation and revamp its risk-taking culture within the bank,” Tang added.
In December, Reuters reported that a preliminary internal bank investigation found Horta-Osorio attended the Wimbledon tennis final in London in July without following UK quarantine rules.
Horta-Osorio also broke COVID-19 rules during a visit to Switzerland in November by leaving the country for a 10-day quarantine period, the bank said in December.
Public scrutiny of the actions of politicians and athletes has grown amid COVID-19 curbs as governments scramble to get their populations vaccinated.
Tennis superstar Novak Djokovic flew out of Australia on Sunday after a court upheld the government’s decision to cancel his visa, ending days of drama over the country’s COVID-19 entry rules and its unvaccinated status.
In Britain, Prime Minister Boris Johnson is under pressure to resign after admitting to attending staff drinks during the May 2020 lockdown.
‘SUCH A WASTE’
After Credit Suisse said Horta-Osorio broke COVID-19 rules in late November, David Herro, vice chairman of Harris, the bank’s third-largest investor, said the chairman still retains his full support. .
Credit Suisse said Monday that Lehmann, the board and the executive board would continue to implement the bank’s strategy.
“We have set the right course with the new strategy and will continue to embed a stronger risk culture,” Lehmann, who was elected to the board in October, said in the bank’s statement.
Lehmann spent more than 10 years at rival UBS, where his roles included heading its Swiss personal and corporate banking unit after nearly two decades at Zurich Insurance Group.
After a disastrous year, Credit Suisse posted a 21% drop in third-quarter profits last year and warned of a loss for the last three months of 2021.
UBS, Switzerland’s largest bank, however, posted its highest quarterly profit in six years in the third quarter.
Shares of Credit Suisse have lost 23% in the past year, while UBS shares have climbed 33% to their highest level in four years.
Horta-Osorio’s sudden exit demoralized Credit Suisse staff, with some wondering what was next for the bank.
“What a waste and yet again we are making headlines for the wrong reason,” said a Credit Suisse senior private banker on condition of anonymity because he was not authorized to speak to the media.
“In the meantime, we froze for a year waiting for the new man’s new strategy! he said.