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Horta-Osorio leaves Credit Suisse in crisis after latest scandal

Credit Suisse is facing yet another crisis after the resignation of chairman Antonio Horta-Osorio over Covid rule breaches.

The Swiss banking group said the 57-year-old, who lasted just nine months in the job, was stepping down as his position had become untenable.

Resentment within Credit Suisse towards the former Lloyds chief was growing after it emerged he broke British and Swiss Covid isolation rules and used a company jet to fly on holiday to the Maldives.

Ousted: Credit Suisse said Horta-Osorio (pictured), who lasted just nine months as its chief exec, was stepping down as his position had become untenable

Revelations about his travel transgressions were seen to be setting the bank back, as Horta-Osorio himself was supposed to be cleaning up its reputation.

His indiscretions are just the latest chapter in a string of Credit Suisse scandals, responsibility for which will now land in the lap of his successor Axel Lehmann.

A Swiss national, Lehmann, 63, joined Credit Suisse’s board last year from rival UBS and will continue Horta-Osorio’s attempts to restore the bank’s sullied reputation.

But as well as trying to shore up Credit Suisse’s governance and risk controls in the aftermath of the Greensill debacle and the Archegos crisis, Lehmann will have to boost morale and renew efforts to reshape the bank’s tarnished image in the wake of his predecessor’s missteps.

Horta-Osorio joined Credit Suisse last summer with the aim of rebuilding its crumbling prestige and improving its internal governance. 

The Swiss bank, which usually prides itself on its privacy and discretion, had been brought to its knees by a series of public calamities.

There was the spying scandal, in which its former chief operating officer paid private detectives to tail two former employees. 

The affair blasted open the usually staid world of Swiss private banking, as stories emerged of a cocktail party bust-up between Credit Suisse’s top brass and a car-chase around Zurich as the spies pursued their target. That cost chief executive Tidjane Thiam his job.

Then there were the two crises of 2021 – Greensill and Archegos. Credit Suisse had funnelled billions of its clients’ money into loans arranged by Greensill Capital, the lender advised by David Cameron which collapsed and is still under investigation by the Serious Fraud Office.

Credit Suisse had also lent a substantial amount of money to hedge fund Archegos Capital Management, and lost billions when the firm’s bets turned sour.

While the bank was still reeling, it was slapped with £350million of penalties by regulators around the world for its historic involvement in the so-called ‘tuna bonds’ scandal.

Jaunt: Resentment towards Horta-Osorio grew after it emerged he broke British and Swiss Covid isolation rules and used a company jet to fly on holiday to the Maldives (pictured)

Jaunt: Resentment towards Horta-Osorio grew after it emerged he broke British and Swiss Covid isolation rules and used a company jet to fly on holiday to the Maldives (pictured) 

Corrupt bankers at Credit Suisse were found to have taken multi-million pound kick-backs when they arranged loans for Mozambique’s government, designed to further the country’s fishing industry.

Horta-Osorio was appointed to help Credit Suisse get its affairs in order, and halt the spiralling collapse in its share price. 

During his decade at Lloyds Bank, he was credited with restoring the lender to private ownership following its government bailout in the financial crisis. 

But instead, Credit Suisse found itself in the news for the wrong reasons yet again as Horta-Osorio appeared to assume he had immunity from Covid travel restrictions.

Last summer, the keen tennis fan travelled to the UK for the Wimbledon finals. He was supposed to self-isolate for ten days, but cut this short to sit in the sunny stands of SW19. His breach of Britain’s Covid rules came just weeks after he was knighted in the Queen’s Birthday Honours list.

In late November, he flew from London to Zurich and was supposed to isolate there for ten days under Switzerland’s Covid rules. But after just four days, he took the company’s private jet to the Iberian Peninsula.

One source close to the bank said its staff were finding Horta-Osorio’s hypocrisy increasingly hard to stomach, as they were being ‘lectured about their behaviour’ and having their bonuses slashed even as their new boss was breaching Covid rules. 

Horta-Osorio said he had chosen to resign because ‘a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally’.

He was due to receive £2.5million in cash for the year, and £1.2million in Credit Suisse shares. While he will already have received £1.9million in cash for the nine months he has worked so far, Credit Suisse said it was down to the board’s remuneration committee to decide whether he would get the remainder of his fees in cash and shares.

It isn’t the first time Horta-Osorio has found himself at the centre of a storm. In 2016 the father of three was forced to apologise to employees for an extra-marital affair, denying that he had used more than £3,000 of company expenses to woo his lover after the pair were pictured together during one of his business trips to Singapore.

And while at Lloyds, he was also blamed for bungling a redress scheme designed to help scores of small business customers who were victims of a major fraud at the Reading branch of HBOS, which was bought by Lloyds.

Dame Linda Dobbs, a former High Court judge, is still running an inquiry into how much Lloyds bosses knew about the HBOS fraud and whether issues at the Reading branch were properly investigated.

And Lloyds was forced to pay compensation after mistreating whistleblower Sally Masterton, who wrote a report claiming that certain HBOS executives had covered up the fraud.

Horta-Osorio leaves Credit Suisse floundering at a crucial time in its shake-up.

Severin Schwan, lead independent director of Credit Suisse’s board, said: ‘We respect Antonio’s decision and owe him considerable thanks for his leadership in defining the new strategy, which we will continue to implement over the coming months and years.’

Horta-Osorio’s departure was welcomed by some investors. Switzerland’s Ethos Foundation, which votes on behalf of pension funds that own around 5 per cent of Credit Suisse’s shares, said the chairman must guarantee that ‘their activities and attitude are irreproachable’.

But David Herro, of Harris Associates, one of Credit Suisse’s top-five shareholders, said he was ‘speechless’ and ‘very disappointed’ to see Horta-Osorio go.


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