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What frustration for Tidjane Thiam. The dream job of the director of Credit Suisse is unexpectedly available. But he is not.
The appointment of Christine Lagarde at the head of the European Central Bank, which is almost certain, will confirm the post of Managing Director of the International Monetary Fund in Washington, a position long coveted by Thiam. Yet he is stuck in Zurich.
Lagarde's appointment also casts an interesting light on Mark Carney's run for the Bank of England's governorship. This suggests that the lack of experience in monetary policy does not prevent the management of one of the largest central banks in the world. This would broaden the BoE governor's potential field, including Christopher Giancarlo, a US financial regulator who has expressed interest in the position.)
But back to the potential vacancy of the IMF, for which Thiam would be considered a strong candidate. There will of course be fierce competition for one of the most prestigious jobs in global finance.
Other candidates include George Osborne, the former Chancellor of the Republic, and perhaps Carney himself, who leaves the BoE in January.
Yet, Thiam has a lot to do for him. The departure of Lagarde would trigger a renewed debate on whether to continue to fill the post to a European or opt for the first time for a candidate from an emerging country. Thiam, a French national who was part of the government of his country, Ivory Coast, conveniently ticks both boxes.
Following the reappointment of Lagarde in 2016, the position should not be filled until the end of his second term in 2021. This may have left Thiam time to resolve the Credit Suisse problem, raise the course of action and go out alive eyes.
But now, the moment is very difficult. After joining Credit Suisse in 2015, Thiam developed a three-year turnaround plan that reduced and diverted the investment bank while refocusing on the group's strong badet management business, particularly in Asia.
The results were disappointing, to say the least. Some critics believe that he has cut the bank too much; others that it cuts too little. Be that as it may, the group's performance continued to weigh heavily on the group and investors suffered. The share price has more than halved since the acquisition of Thiam and is close to the trough reached three years ago.
Insiders think he hoped to be looking for a bigger job now. But after failing to keep his promises to investors, he would have left a mark on his sparkling resume, which includes the McKinsey consulting firm, the Aviva insurer and the leading position of the insurance company Prudential.
"Tidjane desperately needs to raise the price of the stock, and the only way to do it is to make an agreement," says a senior banker.
The most convincing operation on the paper would be to sell Credit Suisse to Morgan Stanley. The bankers say Morgan Stanley boss, James Gorman, would like to expand his wealth management business internationally, and that Credit Suisse would be the world 's number two behind UBS. Credit Suisse would also give Morgan Stanley a much stronger investment bank in Asia.
In Europe and the United States, investment banking activities would overlap enormously, and industry experts believe that significant cost savings could be achieved without too much loss of business. Credit Suisse's Swiss bank could be split if necessary to satisfy the country's regulatory authorities.
Credit Suisse is less than half the size of Morgan Stanley and the Wall Street Bank has the financial strength to close the deal, not least because it would use trading shares at book value for buy a company whose operations are trading at 30%. .
But from Thiam's point of view, there would be a big problem. The sale would seem to be an admission of defeat.
Bankers therefore say that he will also have evaluated other types of transactions that would reduce the bank's investment burden for the group. It could try some kind of investment bank joint venture with another major western group, or perhaps with one or more emerging market banks. But it's hard to see how this could generate enough price rise for the stock to go on a high.
Thiam might conclude that the only way to do this is to sell, even if it damages his reputation, and that it would be better to do it sooner rather than later. After all, the prospects for the investment bank for the next two years are not encouraging, especially in Europe.
The sale to Wall Street would cause more torture to the growing dominance of the US on investment banks in Europe. But Credit Suisse's long-time investors may be too relieved.
So maybe Gorman should give Thiam a ring. If he has not already done so.
To contact the author of this story with comments or news, send an email to David Wighton
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