The Swiss bank’s board is poised to anoint the return of a veteran as the new head of private banking. finews.asia reports on the unexpected detour.

Zurich-based Credit Suisse’s directors will this week convene virtually to deliberate the appointment of Francesco De Ferrari to run its private bank, three sources familiar with the matter told finews.asia. The bank surprised investors five weeks ago when it revealed plans to merge its sprawling wealth activities into a single unit – without specifying who would run it.

De Ferrari’s candidacy hit an unexpected snag last month after the Swiss-Italian, who ran Credit Suisse’s wealth arm in Asia until 2018, had presented to the board, these people said. While Chairman António Horta-Osório as well as CEO Thomas Gottstein had advocated for De Ferrari, the board ultimately eschewed giving him the job right away.

Presentation Rankled

The reasons for the board’s deferring the decision until later aren’t entirely clear, but appear to be rooted in the desire to widen the due diligence of De Ferrari. The wealth executive emerged as the front-runner of a handful of candidates from both within and outside of Credit Suisse, a fourth person familiar with the search process told finews.asia.

A presentation held by De Ferrari, who left the CEO post at troubled Australian wealth manager AMP earlier this year, rubbed some of Credit Suisse's 14 directors the wrong way, two of the people said, without elaborating. 

Aussie Due Diligence

In particular, the board seems to have been keen to avoid any unpleasant surprises down the road from the executive who will oversee as much as 853 billion Swiss francs ($927 billion) by combining activities with the wealthy in Switzerland, in the wider Asian region, and internationally into a global business. 

De Ferrari’s 28-month tenure at AMP in Sydney was marked by crisis management, but also by scandal: A long-time associate that De Ferrari had poached from Credit Suisse left AMP amid reports he harassed co-workers.

Then, De Ferrari was grilled by investors including Harris Associates – also a sizable shareholder in Credit Suisse – about promoting another executive into top management despite a sexual harassment sanction.

Board Forged In Crisis

This sits uneasily at Credit Suisse, where Horta-Osório's primary challenge is to ensure a healthier culture permeates every pore of its risk management as well as its strategy. The Portuguese and British banker has reinforced his board with former top executives of UBS and of Lloyds; former J.P. Morgan commodities chief Blythe Masters and auditing veteran Clare Brady also joined in April.

The group, slammed for poor oversight under Urs Rohner, is being fused by crisis. The delay and detour on De Ferrari’s appointment – which risks a backslide – can be interpreted as a desire to act with far more stringency and sensitivity to corporate culture in the future. It isn't clear where this leaves Philipp Wehle, who until now has run the private bank's biggest chunk.

Rife With Power Struggles

Credit Suisse is rife with power struggles elsewhere, due in part to organizational confusion: besides naming De Ferrari, Credit Suisse is due to disclose who will take over key regional roles in both the Americas as well as the wider European, Middle East, and African (EMEA) region of its business. 

Andre Helfenstein will remain the head of its Swiss bank, while Helman Sitohang has locked in the Asia-Pacific region he has run since 2015. Christian Meissner, formerly of Bank of America Merrill Lynch and Goldman Sachs, is tasked with stabilizing Credit Suisse’s roiled investment bank.

The bank, which didn’t comment on De Ferrari or the nomination process for the top wealth job, is expected to disclose the appointment later this week or early next after board meetings wrap up on Wednesday.  Three weeks ago, it disclosed the surprising exit of François Monnet. The 63-year-old is one of two men who took over in Asia when De Ferrari left in 2018. 

Reporting by Claude Baumann and Katharina Bart