Tidjane Thiam, heads for exit at Credit Suisse

Credit Suisse Group AG said Chief Executive,  Tidjane Thiam, is resigning, a stunning reversal for the executive who was backed by key shareholders after a damaging spying scandal, Bloomberg reports.

Thiam will be replaced by Thomas Gottstein, a 20-year veteran of the bank who leads the Swiss unit.

The bank also said Chairman Urs Rohner has the board’s “unanimous” backing to complete his term until April 2021.

Thiam will step down after presenting the Zurich-based bank’s fourth-quarter and full-year results next week, the lender said in a statement today.

The decision is the culmination of a conflict between the CEO and Rohner that escalated after a recent spying scandal dented the bank’s reputation and prompted difficult questions about the culture at the top of the firm.

While Thiam was cleared in an internal inquiry and a close lieutenant of his took the fall, the bank has struggled to move beyond the scandal after more cases surfaced.

Top shareholders including Harris Associates, Silchester International Investors and Eminence Capital had warned the board of directors ahead of this week’s meeting that they shouldn’t take action against the CEO.

Instead, they urged Rohner to back Thiam or step down himself, in an unusual public display of support for the CEO.

“Tidjane has made an enormous contribution to Credit Suisse since he joined us in 2015. It is to his credit that Credit Suisse is standing on a very solid foundation and has returned successfully to profit,” Rohner said in the statement.

For Thiam, who was born in Africa and previously held top roles at Aviva Plc and Prudential Plc, the departure blemishes a largely successful four years at Credit Suisse, which he pivoted away from volatile trading and toward the more stable business of catering to affluent clients.

While the shares lost about half of their value during his tenure, he won shareholder support for stabilizing the franchise by scaling back trading and bolstering wealth management.