A major Credit Suisse investors says the Swiss bank was right to set a security detail on its top private banker. The move represents a much-needed shot in the arm for battered CEO Tidjane Thiam.
The Swiss bank's tailing of wealth head Iqbal Khan has roiled Paradeplatz and horrified Switzerland's white-glove private banking industry, but Credit Suisse CEO Tidjane Thiam has at least one major backer defending the move.
The Zurich-based bank has a responsibility to protect the assets of its wealthy clients as well as clients and shareholders, Harris Associates' David Herro (pictured below) told media including «Bloomberg». The Chicago-based fund manager is Credit Suisse's second-largest shareholder, after the state of Qatar.
«This includes ensuring that employees who leave fulfill their contractual obligations,» Herro told Swiss investment portal «The Market» (item in German, behind paywall). Provided that Credit Suisse didn't break any laws, Herro said he supported the decision-making by the bank's top management completely in reference to private security for Khan.
Will Heads Roll?
The Swiss banking industry, which is hit by the fallout, feels differently: An altercation near Paradeplatz – the apex of Swiss private banking – runs counter to the industry's carefully cultivated image of discretion, reserve, trustworthiness, as finews.com wrote.
As Chairman Urs Rohner weighs up whose head will roll, Herro telegraphed his wishes in terms of management: «We would be extremely disappointed if someone lost their job because of this episode, as long as the relevant laws were observed.»
Big Investors' Views
Herro, a long-time investor in wealth managers including UBS following the financial crisis of 2008/09, is the first Credit Suisse investor to publicly address the scandal. Qatar, which owns 5.2 percent of Credit Suisse's shares, almost never comments publicly; Norwegian fund Norges and Saudi Arabia's Olayan family each own roughly 4.9 percent, while Blackrock owns just over 4 percent of the Swiss bank.
Larry Fink, boss of the U.S. asset management giant, may well feel differently than Herro. Fink recently published a paean to leadership and purpose in the corporate world which doesn't square well with recent Paradeplatz events. Norges head Yngve Sylngstad, who has pushed the Norwegian fund into making money more ethically in areas like pay and climate impact, is also likely to have views on the spy drama.
