Credit Suisse (CS) CEO to Step Down in June, Bank Confirms Replacement
Shares of Credit Suisse Group AG (CS) were up +1.35 or +5.73 percent to $24.89 per share in pre-market trading this morning, after the company confirmed early this morning that Chief Executive Officer Brady Dougan would step down and be replaced the Tidjane Thiam, currently Chief Executive Officer of UK insurance company, Prudential (PUK). Credit Suisse stock closed at $23.54 per share, up +0.01 or +0.04 percent in Monday's regular trading session.
The bank confirmed this morning that its longstanding Chief Executive, Brady Dougan would be stepping down effective in June after heading the bank for a quarter century. Mr. Dougan is leaving the bank after several adverse incidents which have negatively affected the company's stock price.
Dougan is stepping down after a number of setbacks for the bank; with the most prominent being a guilty plea by Credit Suisse to criminal charges of aiding U.S. customers in tax evasion which "spanned decades". The guilty plea, entered in March of 2014, was the first time a bank of the size and magnitude of Credit Suisse had been convicted of criminal charges, agreeing to pay a penalty of $2.6 billion.
Last month, the bank reported a fourth quarter profit of +921 million Swiss francs versus a loss of -476 million Swiss francs in the same period one year ago. Nevertheless, the results did not reflect the Swiss "surprise" move removing the floor on the euro which allowed the Swiss franc to appreciate significantly.
Mr. Dougan will be replaced by Tidjane Thiam, the CEO of UK insurer Prudential, which is unrelated to the United States insurer of the same name. Thiam has been at the helm of Prudential since 2009 and has presided over a period of strong growth for the company and its share price.
Thiam was lauded by Credit Suisse chairman, Urs Rohner stating that, "His extensive international experience, including in wealth and asset management and in the successful development of new markets, provides a firm foundation for leading Credit Suisse." Thiam however does not have any prior experience working for a bank.
While Dougan was at the helm of Credit Suisse, the company's stock price has declined from the mid $90s in 2009 to its current level. During the past twelve months, Credit Suisse stock has dropped more than -27 percent, in large part due to the large settlement to the criminal charges. The company warned of future legal repercussions after announcing positive fourth quarter earnings last month.
Investors are expressing their optimism with the announcement, with Credit Suisse stock up more than five percent in this morning's premarket. With Thiam as the company's new Chief Executive, Credit Suisse stock could be at the point of making a significant turnaround.
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