© Reuters. Antonio Horta-Osorio CEO of Lloyds Banking Group leaves Downing Avenue in London By Brenna Hughes Neghaiwi and Oliver Hirt ZURICH (Reuters) – Antonio Horta-Osorio might want to draw deeply on the teachings he realized in turning round British financial institution Lloyds (LON:) when he joins Credit score Suisse (SIX:) as its new chairman
© Reuters. Antonio Horta-Osorio CEO of Lloyds Banking Group leaves Downing Avenue in London
By Brenna Hughes Neghaiwi and Oliver Hirt
ZURICH (Reuters) – Antonio Horta-Osorio might want to draw deeply on the teachings he realized in turning round British financial institution Lloyds (LON:) when he joins Credit score Suisse (SIX:) as its new chairman on Friday.
As considered one of Europe’s longest-serving financial institution CEOs, he has acquired plaudits for bringing Lloyds again from the brink in 2011, when in an interview this month he mentioned it was “about to die” after having to be bailed out in the course of the monetary disaster.
At Credit score Suisse one other considered one of banking’s hardest jobs awaits “AHO”, because the 57-year-old was identified at Lloyds, coping with injury from each the implosion of U.S. funding agency Archegos and the ramifications of the insolvency of British provide chain finance agency Greensill.
Mixed, these have triggered multi-billion greenback losses, sackings and bonus cuts at Credit score Suisse, simply as different banks are using bumper buying and selling and dealmaking earnings.
Whereas Switzerland’s second-largest financial institution is investigating what went fallacious, its chief government Thomas Gottstein has flagged a deeper evaluate of the financial institution as soon as Horta-Osorio arrives.
“At Lloyds he was fairly environment friendly in reorganizing. He offered non-core and poisonous belongings comparatively efficiently, minimize prices to the core and restored the financial institution to profitability and full personal possession,” mentioned Man de Blonay, a fund supervisor at Jupiter.
The Portuguese banker’s Lloyds tenure spans the identical decade because the outgoing Credit score Suisse chairman, however Urs Rohner’s time has been marked by upheaval and doubts over the Swiss financial institution’s long-term course.
A lawyer by coaching, and CEO of German tv and radio broadcaster ProSieben earlier than becoming a member of Credit score Suisse as common counsel in 2004, Rohner confronted fierce criticism because it endured a collection of losses and scandals within the final 5 years.
Whereas Lloyds shares have fallen round 25% below Horta-Osorio, Credit score Suisse’s inventory has misplaced almost three-quarters of its worth below Rohner.
With the appointment of Tidjane Thiam as CEO in 2015, Rohner had set his sights on de-risking the financial institution and making wealth administration its focus, two sources aware of the matter mentioned.
But regardless of the turnaround kickstarted by Thiam, who left final yr after a conflict with Rohner over a spying scandal, Credit score Suisse stays uncovered to dangerous trades and relationships.
It misplaced over $5 billion associated to prime brokerage shopper Archegos and faces additional fallout from greater than $10 billion in Greensill-related funds.
Together with the Archegos cost, writedowns and penalties paid by Credit score Suisse since late 2015 complete greater than $15 billion, whereas it’s dealing with at the very least three enforcement proceedings by Swiss monetary market supervisor FINMA.
Rohner has largely steered away from the highlight following the financial institution’s most up-to-date run of issues. However he and Horta-Osorio have been involved in latest months, one supply aware of the matter mentioned, with the intention to safe a easy handover.
Credit score Suisse declined remark.
Horta-Osorio targeted on increasing comparatively sedate retail banking, insurance coverage and wealth administration companies at Lloyds and through his last outcomes name on Wednesday, mentioned returning it to personal possession in 2017 was the spotlight of his tenure.
“Extra necessary than that was the journey alongside the way in which … attaining the aim of serving to the actual economic system of the UK to the extent we may,” he mentioned throughout a media name.
Nonetheless Horta-Osorio has not had a simple trip, dealing with scrutiny over his excessive pay relative to different British financial institution bosses, his dealing with of a historic fraud case and an industry-wide fee insurance coverage mis-selling scandal that finally value Lloyds 22 billion kilos and took years to resolve.
And he has talked publicly about struggles with stress and insomnia as Lloyds was roiled by the 2011 eurozone disaster.
“That led me to a interval of exhaustion as you recognize the place I needed to take just a few weeks out after which got here again. These have been very dangerous days,” Horta-Osorio mentioned this week.
Analysts say his expertise working by misconduct points ought to show useful as he enters Credit score Suisse at a second of threat administration disaster.
“He’s identified for very sturdy consideration to element and drive and we assume that threat administration will likely be on the prime of his agenda,” Maria Rivas, Senior Vice President of World Monetary Establishments at DBRS Morningstar, mentioned.