Can two managers who have never distinguished themselves through outstanding leadership rescue Credit Suisse from its biggest crisis in 166 years?
The latest appointment in the turbulent history of Credit Suisse seems like the latest farce in an ongoing tragi-comedy. Can someone who was passed over twice now take over the operational management of Switzerland's second-largest bank in the most difficult phase the 166-year-old company has ever gone through?
Surprise, Surprise
While everyone deserves a second, or even third, chance in life, the appointment of Ulrich «Ueli» Koerner to the CEO post nevertheless caused surprise in several respects. Koerner had worked for Credit Suisse from 1998 to 2009, and in 2007 seemed the likely successor to then-CEO Oswald Gruebel. Instead, the board of directors tapped the American Brady Dougan.
Ten years after his departure from Credit Suisse, Koerner resurfaced and announced his ambitions, recommending himself as chairman of the board of directors. He was passed over for Portuguese António Horta-Osório, whose tenure was shorted lived.
It is not without a certain irony that Koerner also failed to make it at UBS. He worked there from 2009 to 2020, aspiring to the CEO post held by Oswald Gruebel from 2009 until 2011 when he left as a result of the Adoboli scandal, giving way to Sergio Ermotti in the end.
Lack of Leadership
While it seems it's the third time lucky for Koerner, his ascension within Credit Suisse illustrates just how desperate the situation is at Switzerland's second-largest bank. Koerner and chairman Axel Lehmann, another manager with an enormously important function, have mainly worked in the wings and neither has ever stood out as a particularly remarkable leader.
Koerner and Lehmann are far from the integrative and visionary beacons the bank needs to lead it out of its misery. Lehmann came to Credit Suisse after becoming superfluous at UBS and was unprepared to become chairman after his predecessor, Horta-Osório was suddenly forced to leave his position.
Bad Luck
In this respect, Lehmann was a stopgap who also had the misfortune of the economic and political environment changing radically shortly after he took office causing his hands to be still tied today in terms of being able to move the bank forward. Nevertheless, other leaders and institutions face the same challenges.
The bank is again taking a closer look at its strategy and costs, which is unsurprising given the dismal 2022 half-year results published Wednesday. Yet, although it says it remains set on reducing costs, it hired additional staff and drove costs even higher during the first half year.
Wrong Signal
Lehmann surrounding himself with a CEO with an ambivalent track record sends the wrong signal. In addition to the entrepreneurial know-how that is now required from Credit Suisse's leadership, an inward-looking quality is also needed to bring the disconcerted staff back onto a successful course.
Given his previous reputation, it is unlikely that Koerner has these qualities. Various employees have said that neither did he shine as head of Switzerland at Credit Suisse nor as chief operating officer, or asset management CEO at UBS. There is little to say about his role as Credit Suisse's head of asset management, which he has held since April 2021 during an admittedly difficult period.
Unanswered Questions
Once again, Credit Suisse has failed to take the opportunity to shape momentum confidently and convincingly. With the Lehmann-Koerner duo, too many questions remain unanswered to see the light at the end of the tunnel. Ironic for a bank whose visionary founder, Alfred Escher, fought passionately for the completion of the Gotthard tunnel.
