Reports that Credit Suisse chair Sir António Horta-Osório broke Covid-19 rules for a second time when he attended the Wimbledon tennis tournament in July cap a year of scandals and missteps at the bank.
Sir António is leading an overhaul of the troubled lender, with personal accountability and risk management at the top of his agenda.
Now he finds himself in the uncomfortable position of being investigated by the bank’s own legal team, which found he breached Covid quarantine rules for a second time when he attended the Wimbledon finals in London on 10 and 11 July, Reuters reported on 30 December. Credit Suisse declined to comment.
Sir António apologised earlier this month for breaching Swiss Covid quarantine rules, which he called a “mistake”.
The latest scandal follows a year that the bank’s leadership would surely like to put behind it.
Credit Suisse’s scandalous 2021
The bank started the year with new chief executive Thomas Gottstein aiming to deliver on an “ambitious and achievable growth agenda for 2021 and beyond”, which included plans to grow its investment bank and wealth management business.
Gottstein replaced former chief executive Tidjane Thiam in February 2020 after the latter stood down amid the fallout from revelations that the bank had spied on senior executives.
However, the bank was sitting on a ticking time bomb in its exposure to troubled supply-chain lender Greensill Capital.
By March, the bank was trying to cut down its exposure to Greensill, which insiders feared was overly reliant on its relationship with steel magnate Sanjay Gupta.
READ Credit Suisse explores ways to reduce links to Greensill Capital over Gupta exposure
Greensill Capital meltdown
Credit Suisse said on 1 March it had suspended a group of four private investment funds that contained around $10bn in securities created by Greensill, a move which swiftly triggered the collapse of the supply-chain finance firm.
Greensill filed for insolvency within days of the suspension of the funds, triggering a wide-reaching political scandal over lobbying by former UK Prime Minister David Cameron, who was paid millions by the company.
The bank announced later that month that asset management head Eric Varvel would step down and slashed bonuses by up to 14% for senior executives known as material risk takers.
READ Credit Suisse slashes bonuses, considers clawbacks for top brass amid Greensill fallout
Archegos goes pop
Credit Suisse issued a statement on 29 March saying it faced significant losses from exposure to an unnamed client.
That client turned out to be hedge fund Archegos Capital Management, led by former Tiger Management analyst Bill Hwang, which was forced to sell $20bn in assets after a series of bets went spectacularly wrong.
Credit Suisse’s links to the collapse led to questions about its risk management, coming hot on the heels of Greensill and its exposure to failed German fintech Wirecard.
READ ‘You have to wonder what this says about Credit Suisse risk management’
The bank said in April that it had ousted its investment bank head and its chief risk officer in the wake of the Archegos implosion and said it expected to take a £3.4bn hit from the collapse of the hedge fund.
The bank also said it would cut millions from its bonus pool, despite a strong performance from its investment bank, and the head of its risk committee stepped down.
The co-heads of the bank’s prime broking division left the bank in April.
Sir António’s new broom
The dual Portuguese and British national joined the bank in April, just after the Archegos and Greensill disasters, and set out a vision to clean up the mess. He had previously led Lloyds Banking Group out of the global financial crisis, a tumultuous period during which the UK government had been forced to take a large stake in the bank.
“We need to foster a culture that reinforces the importance of risk management,” Sir António said upon joining Credit Suisse.
READ New Credit Suisse chair Horta-Osorio resets agenda after Archegos, Greensill saga
A report into the Archegos collapse in July blamed a “fundamental failure of management” and slammed the bank’s “lackadaisical attitude towards risk”.
In October, the Swiss banking regulator said Credit Suisse’s surveillance of its executives was more widespread than previously known. The bank also admitted that month to defrauding investors, paying $475m in fines and forgiving $200m in debt to Mozambique to settle its role in a historic corruption scandal.
Sir António unveiled his new strategy in November, which included shutting the prime brokerage unit that had overseen the bank’s work with Archegos.
READ Credit Suisse shutters prime broking after $5.5bn Archegos hit in pivot towards wealth management
The bank also initiated plans to overhaul how it paid bonuses to avoid rewarding risky behavior following its scandal-hit year.
Credit Suisse launched an aggressive hiring spree to fill the gaps in its ranks after an exodus of staff as a result of the scandals.
The bank shook-up its analyst track in a bid to retain and recruit junior talent.
It continued its overhaul in December, hiring a new wealth management chief — Francesco De Ferrari — and making changes to its board.
The bank has been trying to put its 2021 missteps behind it. Sir António’s latest breach of of quarantine rules might not help it on that path.
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