António Horta-Osório has resigned as chair of Credit Suisse after repeated breaches of coronavirus quarantine rules dealt a fatal blow to his promise to restore the reputation of the scandal-hit bank.
The exit of the 57-year-old after less than a year follows a board investigation that found the former chief executive of Lloyds Banking Group broke quarantine rules, including on a trip to London last year to watch the Wimbledon tennis finals.
The investigation, which was finalised last week, also cited an incident in which Horta-Osório used the bank’s private jet for a personal holiday to the Maldives, according to a person with knowledge of its findings.
Horta-Osório held discussions with the bank’s board, led by lead independent director Severin Schwan, over the weekend about his decision to quit, according to people briefed on the talks.
“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. “I therefore believe that my resignation is in the interest of the bank and its stakeholders at this crucial time.”
Embarrassment
The abrupt departure is a severe embarrassment for Credit Suisse, which recruited the Portuguese banker to help reset its strategy after scandals involving Greensill Capital and family office Archegos damaged the bank’s reputation for risk management and raised questions over its leadership.
Axel Lehmann, the former chief operating officer and head of the Swiss business at UBS, has been drafted in as the bank’s new chair, Credit Suisse said. He joined the bank’s board in October.
Andrew Coombs, an analyst at Citigroup, said that “[Horta-Osório] will go down as a short footnote in Credit Suisse’s long history”, but added “his departure leaves Credit Suisse with a lack of strong characters at the top and leadership questions will probably be raised”.
Lehmann said on Monday that he intended to stick with the group’s new strategy and did not plan big changes within the executive ranks.
“We are in constant dialogue with shareholders,” Lehmann told the Financial Times. “I’m highly confident that shareholders will accept Antonio’s and the board’s decision, and will give the management team the necessary support it needs.”
Credit Suisse’s stock fell 2.3 per cent on Monday, leaving it down by almost a quarter over the past 12 months during a wider stock market boom.
Swiss proxy investment adviser Ethos Foundation, which represents Swiss pension funds that own about 5 per cent of the bank’s shares, welcomed the resignation, with its chief executive Vincent Kaufmann saying that the chair must guarantee that “their activities and attitude are irreproachable”.
However, the exit of Horta-Osório, who had won plaudits during his decade running Lloyds, did not win universal support from shareholders. David Herro, vice-chair of US asset manager Harris Associates, one of the bank’s top-five investors, said he was “speechless”.
“We are very disappointed to see the departure of António Horta-Osório from Credit Suisse given his talents and the restructuring plan he initiated there,” he added. “We remain hopeful that, with the various management enhancements... along with a timely execution of this new strategic plan, that Credit Suisse will be not only strengthened but revitalised.”
Travellers
Horta-Osório was found to have breached the UK’s quarantine rules when he flew to London and subsequently watched the Wimbledon tennis finals on July 10th and July 11th. At the time Switzerland was on the UK’s “amber” list of nations facing restrictions, with travellers required to isolate for 10 days on arrival.
In a later incident Horta-Osório violated Swiss Covid-19 rules when he flew in and out of the country within three days. He had travelled from London to Zurich on November 28th, shortly after a 10-day quarantine requirement was introduced in Switzerland following the identification of the Omicron variant.
Horta-Osório apologised for the “mistake” and characterised the breach as “unintentional”.
However, the Swiss newspaper Blick reported that he initially sought exemptions from both the local canton and federal government, but was told he would receive no special treatment and would need to isolate for the full 10 days.
According to a person close to Horta-Osório, the former chair used the bank’s corporate jet to stop off in the Maldives following a business trip in Asia.
Since he became chair, Horta-Osório, who was knighted in Queen Elizabeth’s birthday honours last June, has talked about being “committed to developing a culture of personal responsibility and accountability” at the bank. – Copyright The Financial Times Limited 2022
