The banker tasked with fixing Credit Suisse Group AG was ousted just nine months into the job for breaching Covid quarantine rules, throwing the Swiss financial giant into fresh turmoil as it struggles to emerge from a series of scandals.
Antonio Horta-Osório’s departure, unveiled in a surprise midnight announcement on Monday, brings an abrupt end to the tenure of a turnaround specialist who promised to instill a culture of personal responsibility at the bank after its most turbulent period since the financial crisis. He was replaced by Axel P. Lehmann, a Credit Suisse board member who oversees the risk committee but is little known outside Zurich.
Horta-Osório, who received a British knighthood after reviving Lloyds Banking Group Plc., is leaving after an investigation by the bank into reports that he broke quarantine protocols in the Switzerland and the U.K., underscoring the growing pressure on business, political and even sporting elites who bypass rules. The timing could hardly be worse for the Swiss bank after it counted on the Portugese banker to guide it past the collapses of Greensill Capital and Archegos Capital Management and bring much-needed stability at the top after a series of high-profile departures.
Credit Suisse fell as much as 2.2% in early Zurich trading and was 1.8% lower at 9.38 francs as of 12:09 p.m. on Monday.
Even before news of his quarantine breaches began emerging last month, Horta-Osório’s leadership style had received mixed reviews within Credit Suisse. Some executives who spoke on condition of anonymity before the ouster said the 57-year-old’s blunt approach was what the bank needed and appreciated him walking trading floors from New York to London and Paris. Others described him as divisive.
For Lehmann and Credit Suisse Chief Executive Officer Thomas Gottstein, the challenge will be reviving confidence among employees and investors after a steady exodus of talent and a 23% tumble in the bank’s stock over the past year. Horta-Osório was widely seen as the architect of the bank’s strategic shift late last year to move resources away from the investment bank to wealth management, including an exit from the prime brokerage business at the heart of the Archegos blowup.
“This is about personal responsibility in the professional context,” said Sven Feldmann, associate dean at the Melbourne Business School. “Thinking that the chairman is above the law would have sent a wrong signal throughout the bank. By stepping down, the bank is showing it has zero tolerance for breaking the rules and is serious with implementing a culture change.”
Credit Suisse said last month that Horta-Osório breached quarantine rules by leaving Switzerland before his period of mandated isolation was over. Reuters later reported that the financier had attended the Wimbledon tennis finals in London in early July, a time when arrivals from Europe were obliged to undergo quarantine. At the time, Horta-Osório apologized for “unintentionally” breaking Swiss rules.
“I regret that a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally,” Horta-Osório said in the statement. “I therefore believe that my resignation is in the interest of the bank and its stakeholders at this crucial time.”
Horta-Osório joined Credit Suisse in April. The banker’s supporters have included major Credit Suisse shareholders such as David Herro of Harris Associates. “I am very, very gratified that the person at the top of the organization is extremely capable and has a good understanding of risk,” Herro told Bloomberg TV in October. Herro had also been a supporter of former CEO Tidjane Thiam before his ouster over a spying scandal.