Big shareholders are revolting against chairman Urs Rohner in support CEO Tidjane Thiam – an unprecedented turn of events in Swiss finance. finews.asia examines the Swiss bank's major investors.

With Harris Associates, Silchester International, and U.S. hedge fund Eminence Capital, three big Credit Suisse investors have waded into a power struggle at the helm of the Swiss bank. Their intention is clear: shield Tidjane Thiam from imminent dismissal over a C-suite spy scandal – and dispose of long-standing chairman Urs Rohner instead. 

David Herro, the voice of the antiRohner phalanx, even threatened to have Rohner removed «immediately» should the board sack the CEO. In what appeared to be a show of confidence, Thiam posted an Instagram snap of himself, surrounded by his 11-person top management.

 

It is likely the last escalation in a months-long game of brinkmanship. It follows an executive spying scandal at Credit Suisse unleashed four months ago which has left Thiam on the ropes. 

On Thursday, Credit Suisse's 13 directors meet for a previously scheduled board meeting which is guaranteed to be dominated by the power struggle. For shareholders to back an embattled CEO over a chairman in a leadership crisis has never happened in Swiss banking history.

A Huge Coincidence?

To put the Harris-driven verbal interventions into context: how can shareholders effectively ignore Credit Suisse statutes and dismiss Rohner immediately without a full investor assembly? Nevertheless, the hefty and coordinated rhetoric against the Swiss lawyer, who took the chairman's seat nine years ago, combined with unconditional support for Thiam is remarkable. 

It may be a coincidence that the connection between Harris, nominally Credit Suisse's biggest shareholder, to influential French financial circles is now circulating. The battle for power at Credit Suisse has for weeks been marked by targeted leaks and the heavy artillery of spin doctors.

Biggest Investor is French

Harris Associates is a subsidiary of French asset management giant Natixis – a well-known fact in the finance industry. It is emerging that Natixis and other French interest groups may be behind the attacks on Rohner.

Economist and commentator Gian Trepp sums it up as «France Fights for Control of Credit Suisse» in his most recent blog entry (in German): «Credit Suisse's biggest shareholder is French banking group BCPE».

Why is Credit Suisse of Interest?

Paris-based BCPE is a sprawling financial group  – France's second-largest – which operates Natixis. Harris Associates, which together with its Oakmark fund holds 8.4 percent of Credit Suisse, is just one of roughly two dozen Natixis asset management subsidiaries. The portion of Credit Suisse shares effectively controlled by Natixis, and in turn by BCPE, is likely to be higher.

What interests could BCPE, led by CEO François Pérol, an influential French banker who with close ties to Elysée and is considered a friend of President Emmanuel Macron, be pursuing in regards to Credit Suisse?

Control of the Franc Area

Trepp argues that nothing less than France's geopolitical interests are playing out in the battle at Credit Suisse. Control over the second-largest bank in Switzerland will emerge as especially meaningful as financial centers London, Frankfurt, and Paris jockey for position following Britain's exit from the European bloc.

With Thiam – a French-Ivorian with impeccable ties to the Parisian financial elite – France could better enforce these interests, the commentator insinuates. A fantastic conspiracy theory? Europe's positioning as an economic power without any strong banks is hotly debated – U.S. firms have pulled far ahead of their continental counterparts in recent years.

Making a «European Champion»?

The crisis of Europe's feeble banking sector preoccupies, of course, officials from the German chancellery to Paris' Elysée Palace. Calls for a new «European champion» have until now stumbled amid delays in completing the European Banking Union.

Fears voiced by top European bankers and finance executives are very real: Europe needs at least one meaningful finance player in order not to lose the domestic market to competitors from the U.S. or China. 

French Interests Revealed

A breakthrough on the banking union is expected this year, which could spur a wave of mergers that French banks like Société Générale want a proactive part of. Swiss banks UBS and Credit Suisse have repeatedly warned that consolidation in Europe is imperative: UBS boss Sergio Ermotti recently said the continent's banks are «too small to survive».

Does Credit Suisse play a role, as a hypothetical acquisition target?  Based on its strong wealth management position, its still-potent investment bank, and its $32 billion market capitalization – it could. With France's BCPE, the Swiss bank also has a powerful investor beginning to reveal its interests.