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Raiffeisen has nearly solved one half of its management problem, but the Swiss lender is on the back foot on finding a new CEO. finews.com shines a light on potential candidates.

The St. Gallen-based bank is grappling with the fallout from a criminal investigation of ex-CEO Pierin Vincenz. This Saturday, the cooperative bank’s members are poised to elect Swiss banker Guy Lachappelle as their new chairman.

Lachappelle, who currently runs Basler Kantonalbank, is expected to win the backing of Raiffeisen’s delegate banks – but make concessions. This will shift the focus on the race to replace CEO Patrik Gisel, who took over from his mentor, Vincenz, three years ago.

Wanted: Thick Skin

In July, Raiffeisen said it had started looking for a new CEO, and expected to secure Gisel’s replacement by year-end. The messy headlines around Lachappelle’s election highlighted what the incoming CEO is in for: Raiffeisen management needs thick skin.

Is the CEO job at Raiffeisen still attractive? The election of Lachappelle redefines the job profile for Gisel’s successor, because the 57-year-old has already promised to be a full-time, hands-on chairman. With Lachappelle on board as the public lightning rod, the CEO job has automatically shrunk in significance.

Redefining the Bank

Hands-on the new chairman has to be: Raiffeisen is facing major structural changes ordered by its regulator, an enforcement probe by overseer Finma, an internal investigation of the Vincenz era, restoring its damaged reputation, and shielding the bank from further fallout should the ex-CEO be criminally charged.

Years ago, a Swiss retail banking rival to Vincenz illustrated Raiffeisen’s cooperative structure on a beer coaster: running Raiffeisen, the rival told Vincenz, was like sitting at the bottom on an inverted pyramid and taking orders from member banks. The ambitious Vincenz flipped this, centralizing power of the 246-bank cooperative at headquarters.

Following the Vincenz scandal, the individual banks are expected to take more authority and decision-making off St. Gallen under a plan dubbed «Focus 2021». The shift of power to the grassroots comes after a mild pushback against Lachappelle.

A "Mere" Service Center?

The two factors – CEO-turned-chairman Lachappelle rolling up his shirt sleeves to dig in, and the diminished power and prestige at headquarters – take the shine off the CEO job, for which Gisel took home 1.8 million Swiss francs ($1.8 million) last year.

If Raiffeisen Switzerland is ultimately demoted to a sort of service center for its member banks, then an outstanding «engine room»-talent would fit (Credit Suisse’s recently-departed Swiss operating chief Dagmar Kamber-Borens has demurred, according to a source familiar with her thinking).

Who could still be interested? The list is surprisingly narrow, according to sources. Besides being politically sensitive enough to mend fences, the CEO will need experience at one of Switzerland’s five systemically-relevant banks to appease its regulator (Raiffeisen was in 2014 deemed too-big-to-fail by the Swiss central bank, which has persistently cautioned of an overheated housing market, because of the bank’s outsize mortgage book).