Axe falls on CEO of Credit Suisse, Prudential's chief to replace him: report

ZURICH (Bloomberg) - Credit Suisse Group, Switzerland's second-biggest bank, is preparing to name Prudential's Tidjane Thiam to replace Brady Dougan as chief executive officer, according to two people briefed on the plan.

Prudential shares were suspended from trading on the Hong Kong stock exchange pending an announcement relating to "inside information", the British insurer said in a filing on Tuesday.

Thiam, an Ivory Coast-born French national, has led Prudential as CEO since 2009. The insurer is poised to name the head of its U.S. Jackson National Life unit, Mike Wells, to succeed him this year, Sky News said. Officials at the firms declined to comment when reached by Bloomberg News.

Dougan, Credit Suisse's leader since 2007, has contended with pressure to shift strategy and restructure businesses as the Zurich-based lender's shares posted one of the worst performances among European bank stocks this year.

Even as calls for him to resign died down following the company's settlement with U.S. authorities last year on allegations it aided tax evaders, questions remained over the firm's objectives and capital. Thiam, 52, leaves Prudential, Britain's largest insurer by market value, as the stock trades near a record high.

The Financial Times reported Credit Suisse's decision to hire him earlier Monday.

Thiam joined Prudential from U.K. insurer Aviva, where he was head of the company's European unit. He worked for management consultant McKinsey & Co. from 1986 to 1994, focusing on insurers and banks. From 1994 to 1998, he was head of the National Bureau for Technical Studies and Development in the Ivory Coast. He was appointed Minister of Planning and Development before leaving the country after the December 1999 military coup.

Dougan, a 25-year veteran of Credit Suisse and the first American to serve as its sole CEO, was one of the few leaders of a global bank to survive the financial crisis and the scandals that followed. On Feb. 26, Standard Chartered named Bill Winters to replace Peter Sands, who led the U.K. firm through the turmoil.

While Dougan's down-to-earth manner and knowledge of markets have won him the trust of some shareholders, some Swiss media and retail investors repeatedly questioned his loyalties as an American and criticized his pay packages and the fact that he doesn't speak German. Still, Dougan, 55, kept his post while UBS Group, Switzerland's biggest bank, has had four CEOs in the same period. UBS has been led by Sergio Ermotti since September 2011.

Dougan, who headed Credit Suisse's investment bank before becoming CEO, has resisted calls for a radical downsizing of the securities unit following UBS's decision to do so. He instead focused on incremental cuts to the business and costs to improve earnings. The strategy hasn't paid off for shareholders, with Credit Suisse shares currently trading at about 1.1 times the bank's tangible book value, compared with 1.4 times for UBS.

Credit Suisse's stock has slumped 7.5 per cent this year, compared with a gain of 10 per cent for the Bloomberg Europe 500 Banks & Financial Services Index.

Dougan has been trying to rebuild Credit Suisse's capital ratios, which were battered last year by U.S. fines for helping American clients evade taxes. After reporting a common equity ratio of 10.2 per cent for the end of December, the bank two weeks later restated earnings because of higher provisions for mortgage-related litigation, pushing that ratio to 10.1 per cent, barely above Credit Suisse's minimum target.

Dougan, an Illinois railway dispatcher's son known for his mild manner, started his career at Banker's Trust Corp. He moved to Credit Suisse in 1990 as part of a team led by Allen Wheat, where they set up a derivatives unit called Credit Suisse Financial Products.

When asked about his extravagances by Bloomberg News in 2007, after succeeding Oswald Gruebel as CEO, Dougan listed his focus on work and a fondness for exercise. He was described in news stories at the time as a quiet man who jogs, prefers diet sodas and cuts costs by discouraging color copying.

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