Credit Suisse Group AG is weighing its second broad management overhaul in as many years as Chief Executive Officer Thomas Gottstein struggles to turn around the lender after a series of scandals and profit warnings.
The Zurich-based bank is considering replacing long-standing executives on the management board, including top lawyer Romeo Cerutti, chief financial officer David Mathers and Helman Sitohang, who heads the Asia Pacific region, according to people familiar with the matter, who asked not to be named because decisions haven’t been finalized.
Credit Suisse last week shocked investors with its fifth profit warning in six quarters, as the hit from Russia’s war in Ukraine combined with a growing burden of legal costs for the struggling lender hurt profitability. While the lender has warned that 2022 will be a transition year after the Archegos Capital Management and Greensill disasters, the succession of blows is starting to worry top shareholders that the bank is far from having its house in order.
“Senior management under the leadership of the group CEO together with the board of directors is regularly discussing succession plans and is reviewing senior appointments for certain positions, including for certain legal entities, regions and the executive board,” Dominik von Arx, a spokesperson for Credit Suisse, said in an emailed statement. “However, no board decisions have been taken and we will communicate at the appropriate time.”
Norway’s sovereign wealth fund, one of the largest shareholders in Credit Suisse, said that it is backing a call for more transparency by the Ethos Foundation and seven Swiss pension funds at the annual shareholder meeting into the collapse of a group of supply chain finance funds that the bank ran with Greensill.
More than half the executives on Credit Suisse’s management board were ousted in the aftermath of Archegos and Greensill a year ago. Last month, several long-standing directors also decided to not stand for re-election after coming under pressure from major shareholders including David Herro of Harris Associates.
The bank is also looking for a new chief executive for its U.S. legal entity, people familiar with that search told Bloomberg earlier. The position was held by Eric Varvel until he announced his departure in December.
The bank last week said it is setting aside 600 million francs ($627 million) in legal provisions, including for a verdict of potentially more than $550 million in a Bermuda case related to former private banker and convicted fraudster Patrice Lescaudron. As a result of those provisions and hits related to Ukraine, Credit Suisse said it will post a first-quarter loss on April 27.
The provisions add to a string of hits over the past couple of years, including the write down the value of its stake in a hedge fund and about $5.1 billion in losses related to Archegos.
Cerutti joined in 2006 as general counsel for private banking and as a global co-head of compliance for the whole bank. He became general counsel in 2009. Sitohang’s region was recently dismantled as part of a restructuring that merged the various Asian businesses into global units, which left him with a regional responsibility but no business division to run.