Thomas Gottstein: The head of Credit Suisse was hit by a number of crises
In the worst of Credit Suisse’s “spygate” scandal – then Tidjane Thiam CEO Iqbal Khan, with his former sponsor – put Thomas Gottstein, one of the bank’s top executives, at dinner. Kronenhalle, The main restaurant in Zurich.
Throughout the room he saw Khan’s personal PR advisor, who he believed was blazing the flames. Gottstein interrupted the meal to walk and scold him. The exchange was hard enough to see the diners – sitting under the paintings of Miró, Picasso and Chagall – squeezing their necks, as people who knew the contretemps remembered.
The episode marked a rare spectacle of the 57-year-old Gottstein’s public attack, which led to Credit Suisse being Switzerland’s first national team for 18 years last year. It was an unexpected opportunity, as Thiam’s inadequacy was seen as a safe pair of hands that would fix the boat.
But so far Gottstein’s tenure has been very low.
It has been approved by Credit Suisse this week $ 4.7 billion loss Since the fall of Archegos, he has given the family office billions of dollars and inadvertently found control of his risks.
As Gottstein’s problems deepen, Credit Suisse may lose some of its most important ultra-rich customers. up to $ 3bn Greensill Capital, a supply chain finance company, went bankrupt in a fund last month.
Both events were a long way from Gottstein’s commitment to start in 2021. “clean slate”. Once again they have pushed the focus of the Credit Suisse center and raised questions about the ability of its CEO – a year after the promotion on the battlefield. Multiple internal and regulations probes textile.
Born in Zurich in 1964, Gottstein was not always directed to the top levels of European banks. A skilled player, he represented Switzerland at the World Amateur Championships between 1984 and 1992. He once had a +3 handicap, but now plays -2.
An avid skier, Gottstein is spotted at the Swiss ski resort of Klosters, where he spends his time with his wife, two children and two dogs, taking a Boston Terrier puppy to Germany the weekend after getting the promotion.
After a brief stint at UBS, Gottstein joined his competitor Credit Suisse in 1999 and initially worked through an investment bank, mostly Glencore’s $ 11 billion IPO 2011n.
“It’s not an arrogant risk taker, which you sometimes find in American bankers,” said a Swiss banker who had worked on several agreements with Gottstein. “Attention to detail is probably one of its weaknesses, but other than that, it’s very intelligent and understands risks and capital markets.”
Gottstein caught Thiam’s attention in 2015 when the French-Ivorians merged with Credit Suisse, despite their different styles and behavior. Thiam was a famous, excellent and global financial figure; He is a kind of Gottstein, little known outside of Zurich, often dressed without a tie and wrapped in sleeves.
The two made the connection and Thiam lifted Gottstein to the home bank of lenders in 2016, ahead of the business list. finally thrown. They remain close.
“He’s known for being very tough on some Swiss, but I think he’s a very direct shooter,” a former colleague said. “I would be terribly surprised because his character would say something harmful or false.” Another person he knew Gottstein described him as a “boy scout” because of his strict adherence to the rules.
Walter Kielholz, outgoing president and former CEO of Swiss Re, said Gottstein “has a great personality to run an institution like Credit Suisse in good and difficult times.” He added: “It is deeply rooted within the company and in the business community.”
A few days after Gottstein took power last February, Europe entered a blockade caused by coronavirus. He received praise in Switzerland for directing a $ 20 billion package emergency loans to support small businesses provided by 121 home lenders.
But he had renewed pressure in April when Credit Suisse lost money Luckin Coffee, the default margin of $ 518 million. The Swiss bank was a member of the banking union that lent it to the Chinese coffee chain.
In the summer, Gottstein ordered it business renewal aimed at reducing costs and improving efficiency. Lara Warner was promoted to chief risk and compliance officer and Brian Chin as head of investment banking.
This lasted only a short time. At meetings rushed to the Easter weekend, Gottstein proposed the removal of Warner and Chin, which were approved by his co-directors, according to the people involved in the decisions. Management is putting pressure on Gottstein to take decisive action after being blinded by the losses of Greensill and Archegos. Five other senior executives were also released.
“He had to release two people he promoted last year,” a colleague said. “That hurt.” Another added, “He can have a very nice level on a personal level, but he can be a tyrant when things go wrong, when he crushes shouts and feet.”
There were further losses in the second half of 2020. Credit Suisse took a $ 450 million amortization on its stake in U.S. alternative management York Capital Management, and announced a potential $ 680 million revolution as a result of U.S. mortgage bond issues during the financial crisis.
After disagreements between Greensill and Archegos, insiders believe Gottstein should not lose his job. Credit Suisse’s new chair – the outgoing Lloyds CEO António Horta-Osório – will arrive on April 30th. “AHO,” as it is known, is a few weeks earlier than its CEO and has a much more “practical” style than its predecessors. , Urs Rohner.
For Gottstein, the concern is that Horta-Osório wants to cultivate his “clean slate”.
Additional report by Arash Massoud in London