New Credit Suisse CEO Reins in Hopes for a Quick Fix

By John Letzing 

ZURICH-- Credit Suisse Group AG's new chief executive, who took over this week, is already playing down optimism he can quickly lift the Swiss bank out of its recent malaise.

"Expectations have kind of run away," said Tidjane Thiam in a recent interview in Zurich.

When the 52-year-old's name began circulating among Credit Suisse board members last year, some didn't recognize it, according to a person familiar with the matter. And when his appointment was announced in March, there was surprise among analysts that a former insurance executive without banking experience was taking on one of the biggest jobs in the industry.

But the former McKinsey & Co. consultant and government minister in his native Ivory Coast dismissed those concerns. Investors followed suit. Since Mr. Thiam's appointment, the bank's shares have gained about 17%.

Pundits and analysts reckon Mr. Thiam will bolster Credit Suisse's capital, and shrink its relatively expensive investment bank to focus more on wealth management. That kind of program would mirror changes in recent years at UBS AG, which has earned Credit Suisse's Zurich-based rival plaudits and a stronger share price performance.

Mr. Thiam says he has no desire "to copy somebody else."

His appointment comes amid a broader changing of the guard at big European banks. There are new leaders expected to deliver strategies that diverge from their predecessors at Germany's Deutsche Bank AG, Spain's Banco Santander SA and London-based Standard Chartered PLC.

None has a résumé quite like that of Mr. Thiam.

He was four years old by the time he first saw his father, a politically active journalist turned government minister who had been jailed shortly after Mr. Thiam's birth for allegedly plotting a coup. After his release, Mr. Thiam's father was awarded a job as a diplomat, and the family was shipped off to France. "It's a good way to get rid of political enemies, " Mr. Thiam said.

In Paris, Mr. Thiam went to the elite École Polytechnique to study engineering, and later joined McKinsey. One Saturday night, an answering machine message requested his presence at a meeting the following Monday with Ivory Coast's new president. Soon after that, in early 1994, Mr. Thiam was put in charge of assessing Ivory Coast's infrastructure investments. In 1998, he was appointed minister of planning and development.

Not long after that, his political career came to a grinding halt.

In late 1999, Mr. Thiam was in Paris en route to spend Christmas with his family in the U.S., when a member of his staff called with a message: "All hell has broken loose."

He returned home, where leaders of a military coup had jailed other government ministers. Mr. Thiam was forced to live under armed guard. One day, driving without a security detail, his car was overtaken by a pickup truck loaded with machine gun-toting rebels.

"I said every prayer I knew," Mr. Thiam recalled. "I thought it was over." But the men merely banged on the hood of the car, and cheered that a rattled Mr. Thiam was "with us," before driving off. The events "saturated my appetite for politics," he said.

He returned to France and McKinsey, before moving to the U.K. First he joined insurer Aviva PLC, and then Aviva's rival Prudential PLC in 2008, initially as chief financial officer before becoming CEO.

Prudential's share price soared during his tenure, partly thanks to a strategy focused on growing in Asia that was cheered by analysts and investors. But Mr. Thiam is quick to note that things could have been different.

"People rewrite history. I was extremely challenged, extremely criticized for a long time," he said.

A key moment was an attempt to buy AIA Group Ltd in 2009. The deal was shot down by shareholders, but many analysts now acknowledge it could have been beneficial as AIA went through years of strong growth.

At Credit Suisse, Mr. Thiam circulated an internal memo on his first day on the job, noting plans to be "ruthlessly selective" about priorities.

"I'm not afraid of being unpopular," he said. Before the end of the year, Mr. Thiam said, he'll clarify his intentions for the investment bank, his goals for Credit Suisse's capital levels, and plans for growth.

Under Mr. Thiam's predecessor, Brady Dougan, Credit Suisse drew criticism from analysts for reductions of the investment bank perceived as piecemeal, and a capital cushion that was deemed thin.

If Mr. Thiam does attempt a dramatic shrinking of its investment bank, that could prove difficult, said Helvea analyst Tim Dawson.

"Everyone kind of assumes he'll appear like Harry Potter, and wave a wand and magically turn Credit Suisse into UBS," the analyst said.

UBS was fortunate to shed assets from its investment bank when investors were more desperate for returns, Mr. Dawson said. Now, with interest rates potentially on the rise, Credit Suisse may not enjoy the same benefit.

Mr. Thiam doesn't seem troubled.

"I'm very calm," he said.

Write to John Letzing at [e-mail]

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