Credit Suisse needs to salvage reputation and personnel after latest

LONDON — Credit Suisse Chairman Antonio Horta-Osorio resigned on Sunday after violating Covid-19 quarantine rules, the latest in a series of high-profile scandals that have rocked the Swiss bank in recent years.

Horta-Osorio took over as chairman of Switzerland’s second-biggest lender in April last year, with a mission to clean up its corporate culture after its damaging involvement with collapsed investment firm Archegos Capital and insolvent supply chain finance company Greensill.

These came on the back of a bizarre and protracted spying saga which ultimately led to the resignation of former CEO Tidjane Thiam, who was replaced by Thomas Gottstein.

Horta-Osorio, who was found by an internal investigation to have committed multiple breaches of Covid quarantine requirements in the U.K. and Switzerland, will be replaced by UBS executive Axel P. Lehmann. Credit Suisse has insisted that its strategic overhaul, announced in November and which includes a scaling back of its investment banking business, will continue undeterred.

Analysts told CNBC Monday that the bank had made the right call in removing Horta-Osorio, and that Lehmann was a wise appointment as the firm looks to deliver stability.

Bruno Verstraete, managing partner at Zurich-based asset manager Lakefield Partners, said Lehmann was a choice that represented the stability the bank needs, given his wealth of experience in risk management.

“One can only hope that the scandals will fade over time, and that they will be able to turn the nose of the ship in the right direction, away from the storm. It is about time, that is clear,” Verstraete told CNBC.

However, some emphasized that the problems run deeper than one individual, with the bank facing a litany of legal issues.

“I think the job at hand for Credit Suisse over the coming months and year is frankly to repair its risk management, to repair its reputation, and obviously one factor that needs to be looked at carefully is, can it retain its talent?” said Bob Parker, investment committee member at Quilvest and former senior advisor at Credit Suisse.

“One thing that happened after Archego was that a number of talented people in the investment bank left the firm.”

Share price woes

Credit Suisse’s share price has taken a substantial hit over the past 12 months, and analysts have pointed to the divergence from the performance of its domestic rival UBS as an indication that investors remain skeptical about the turnaround.

Credit Suisse is down more than 24% over the past year and was last trading at 9.37 Swiss francs ($10.25) per share on Monday morning, while UBS has gained more than 31% in the past 12 months to trade at around 18 Swiss francs per share.

“I think the performance of the share price in recent months clearly reflects the view by investors that a number of these legacy issues are going to take time to repair, and I…