Less than six months into the job, Credit Suisse Chairman Axel Lehmann is being pressured to pull the plug on the tenure of his CEO.

The Swiss leadership due of the bank with «Suisse» as part of its name could be short-lived, as a major shareholder in Credit Suisse is calling for the ouster of CEO Thomas Gottstein.

Clearly, Gottstein inherited a whole host of already well-documented challenges when he took over as CEO, but a view has emerged recently that the operational performance of the bank is weakening. 

Ratings Downgrade

Fitch joined S&P this week in downgrading the bank, saying that «Credit Suisse's weak operating profitability compared with peers' highlights the execution risk during the group's restructuring in a difficult market environment and indicates the challenges for the bank to strengthen its performance over the next 24 months as well as for its risk governance», as finews.com reported. 

Now, the board of directors seems to be rumbling, with unnamed members seeking to explore if and how Gottstein could be replaced, preferably by the end of the year. Gottstein, a Swiss citizen, took over the post starting in 2020 from predecessor Tidjane Thiam, who resigned under pressure. 

A Mantra and A Roadblock

Axel Lehmann was appointed chairman in January following the forced departure of António Horta-Osório, and with Gottstein occupying the CEO role, the bank has two Swiss citizens in the top roles.

In what seems to have become a mantra, Lehmann has repeatedly offered his support for Gottstein. As recently as April, in both press reports and Credit Suisses annual meeting. 

At this point, Lehmann seems to be a lonely if not a  solitary roadblock. According to a «Reuters» report, Harris Associates, a major Credit Suisse shareholder said the board must decide on Gottstein, with some already having made up their minds to oust him.

It remains to be seen if Lehmann sticks to his guns, although he has announced another year of transition at the bank which also seems to have become a mantra.

Fighting on Multiple Fronts

The twin debacles surrounding the bankruptcy of Archegos and the closure of Credit Suisse's Greensill funds, continue to haunt the bank. Foreign authorities have now launched criminal investigations into both cases, while the Swiss Financial Market Supervisory Authority (Finma) has opened inquiries.

Class action suits have also been filed in the U.S. related to Archegos-Greensill. U.S. plaintiffs have also targeted CS management and business relationships with Russian oligarchs.

Gottstein's Tenuous Position

Some might agree with David Samra, head of another of CS's major shareholders, Artisan Partners. There is no reasonable case to be made why a person like Gottstein should be left in his post, he said publicly.

Gottstein's base within the bank appears to have narrowed. Lehmann joined Credit Suisse as a board member only last year after leaving UBS as head of Switzerland. With a board that is almost entirely new, he likely lacks the power base after such a short time as Chairman. Gottstein is in a similar position as the last one left there from the «old guard,» as finews.com recently observed.

Listening to warning signals

On the executive board, he is likely to be close to the new head of wealth management, Francesco De Ferrari, and the new head of Switzerland, André Helfenstein. According to people familiar with the bank, however, there has been some bickering among individual managers.

And as the departure of Lehmann's predecessor Horta-Osório showed, the chairman is not necessarily needed to push through important personnel decisions at the board level. 

Still, major shareholders and board members could also take Lehmann at his word. «We need a culture that allows dissent in order to avoid mistakes and learn from them. Ideas and warning signals belong on the table, not under the table,» the chairman said at the annual general meeting in April.