Before even starting her job as European head of Credit Suisse, Francesca McDonagh has been named as the new COO, becoming the CEO's right hand woman. 

In April, Francesca McDonagh was announced as Credit Suisse's CEO of Europe, Middle East, and Africa region but even before her starting date on October, she has been appointed as the bank’s chief operating officer (COO) and as the right hand of new CEO Ulrich Koerner, who replaced Thomas Gottstein last month.

This brings the former Bank of Ireland head a good deal closer to the top post at a global banking group, the «Irish Times» writes, adding that some of her colleagues were surprised when the hands-on manager remained with her previous employer for almost five years as they assumed she would move on to bigger things sooner. 

Trial by Fire

The current situation at Credit Suisse somewhat resembles that which McDonagh found at Bank of Ireland in 2017 when the commercial lender was embroiled in a mortgage scandal and still owed billions of euros to the state in the wake of the financial crisis. Coming from competitor HSBC, she put the Irish bank on a turnaround course. To achieve a return on equity of at least 10 percent, she reduced expenses by around a third within five years. In the past two years alone, 1,300 jobs have been cut at the Bank of Ireland.

With her reputation as a cost cutter, McDonagh will very much appeal to Koerner who was dubbed «Ueli the Knife» for his past cost-cutting efforts. In announcing its quarterly results in July, Credit Suisse said it was also reviewing its strategic plan and would provide more details when reporting its third quarter results, as finews.asia also reported.

As Credit Suisse announced on Tuesday, the new COO will also be in charge of improving efficiencies throughout the bank. Michael Bonacker, who will be the new head of group cost transformation, will report directly to McDonagh.

More Than a Cost Cutter

Raised in London and educated at Oxford University, McDonagh is not described as a mere cost cutter but also said to be a good listener and quite capable of admitting her own mistakes and adjusting her actions accordingly. 

At Credit Suisse, where in recent months the situation has proved unpredictable and tumultuous, those traits may serve her well. Like Ralph Hamers at UBS, she belongs to the new generation of bank managers who demand a sense of «purpose» for their company. With this as a guiding principle, McDonagh is said to have inspired the Bank of Ireland staff.

Stronger Salary Footing

The new Credit Suisse vice chair has to refute the implicit accusation that has accompanied her since her appointment to Credit Suisse. Namely that she wanted to escape the salary cap at the Bank of Ireland where she was prohibited from earning more than 500,000 euros ($497,000). Despite the cap, the Bank of Ireland managed to push through special permission for a higher salary during her tenure.

At Credit Suisse, she is likely to be on a stronger footing in terms of salary. In the «annus horribilis» 2021, which was marked by change, the bank transferred a total of 38.57 million francs to 15 members of the executive board.