Quick read: Thiam and the Credit Suisse revolution

1.    Surrounded by doubters: from Prudential to Credit Suisse

Tidjane Thiam’s appointment to Credit Suisse from Prudential in 2015 came under fire from day 1. But he’s never ducked a fight. Prudential’s shareholders had stopped him from buying AIA for $35bn. It’s worth $100bn now. Being right about AIA made him enemies – and left him with something to prove. Read more…

ʻPeople were acting as if I had landed at the bank from Mars. Saying it was risky for Credit Suisse to appoint a non-banker felt like a cheap shot.ʼ – Tidjane Thiam

2.    Shock and awe: cutting trading, serving the private bank

First on the agenda was unlocking the potential of the bank’s private banking and wealth management operations – and cutting back on trading. At the start of 2015 Credit Suisse’s markets business was more than half of group RWAs. Now it is about a third. Traders would no longer be masters of the universe. The ones that kept their jobs would be serving the private bank. That shift would be painful. Read more…

ʻThis is a fabulous bank. Or let me be more precise: it has always had a fabulous bank within it.ʼ – Tidjane Thiam

3.    The richest of the rich: a new approach to UHNW clients

Credit Suisse now covers ultra-high net-worth folk in the same way investment banks have covered the C-suites of multinationals. Personal visits are combined with sophisticated financial services. Net new assets are pouring in at three times the pace of three years ago. Market share of flows from the richest of those clients is up from 25% to 70%. But keeping them happy can mean turning down investment banking work for others. Read more…

ʻThe client’s trust in us is worth more than the fees we may lose in the short term.ʼ – Tidjane Thiam

4.    The necessary outsider: what Thiam could see, and what scared him

Thiam saw what insiders could not or did not want to: the bank had taken on too much risk. It had come through the financial crisis better than most, but had lost its way. The markets businesses where it had placed its chips were subject to low volume growth and margin compression. Returns were volatile, costs were too high. Regulators were circling. Raising capital was essential. No wonder it took 19 meetings to convince Thiam to join – and no wonder he said ‘no’ twice. Read more…

ʻI couldn’t sleep. July 2015 may have been one of the worst months of my life.ʼ – Tidjane Thiam

5.    The IPO that wasn’t: how to buy time and influence people

Markets struggled to understand the plan for an IPO of Credit Suisse’s Swiss Universal Bank when Thiam announced it in late 2015, but what wasn’t understood at the time was that he never intended for it to happen. The proposal brought him criticism, but what it bought him was time – and the opportunity to force through sorely-needed changes in the Swiss business. Read more…

ʻThe insurance part of my brain was very used to thinking about contingent liabilities. I now realized that what we needed was a contingent asset.ʼ – Tidjane Thiam

6.    ‘Something went wrong’: an early setback from trading losses

Thiam’s assurances that he understood his firm came back to haunt him when the bank revealed new trading losses in late 2015. But the setback convinced him that his restructuring was right. Senior bankers left, but one who stuck with him was Jim Amine, who agreed that the best strategy was to grow wealth management while staying in those investment banking areas with low complexity and good returns. Read more…

ʻI stood up at a town hall and said: I’m a New York investment banker and I believe in this strategy.ʼ – Jim Amine

7.    Standing up to bankers: lessons from Cote d’Ivoire

Much earlier in his career, Thiam had been appointed to a cabinet post in Cote d’Ivoire, negotiating with the IMF and World Bank and implementing a currency devaluation. It was a tough experience that he was able to draw on later in life – not least when facing down bankers disappointed with bonuses. Read more…

ʻWe had security guards. I looked at them and could see that even they were worried.ʼ – Tidjane Thiam

8.    ‘There is no plan B’: Thiam and the DoJ RMBS settlement

By 2016 Thiam’s restructuring of Credit Suisse was under way, but now he faced an even tougher challenge: dealing with the US Department of Justice, which was baying for blood over RMBS misselling. And he had vast legacy positions to resolve. Read more…

ʻI asked the lawyers: What’s our plan B? And they told me: You’ve just got to go and explain our situation to her. There is no plan B. Sorry.ʼ – Tidjane Thiam

9.    Pulling together: how structure has helped Thiam’s vision

Thiam’s restructuring of Credit Suisse has simplified the bank. He likes the accountability that comes with managers that are responsible for a single region. It’s a flatter structure that is seeing the emergence of a new cadre of managers – all of whom are closer to clients than in the past. Read more…

ʻI want each of my CEOs to be accountable for a specific geography. When I hear of a problem, I can call them up and deal with it more easily than going to a global product head.ʼ – Tidjane Thiam