Shares in Prudential fell by as much as 4% after the FTSE-100 insurer said Thiam’s stint of more than five years as chief executive would end after May’s annual meeting. Credit Suisse shares leaped 8% in early trading as the appointment was welcomed by the ailing lender’s investors.
Thiam is credited with turning Prudential into Britain’s most successful insurance company by overseeing rapid growth in Asia and the US. At Credit Suisse his job will be to turn around a company criticised for responding too slowly to the new, tougher realities of banking since the financial crisis.
Prudential’s share price has tripled since Thiam took over in October 2009, while Credit Suisse’s shares have more than halved over the same period.
Matthew Preston, an insurance analyst at Berenberg Bank, said: “Over the last five or six years, Prudential has done very well and Credit Suisse has done not so well and people are hoping Tidjane can bring some of that to Credit Suisse.
“People are probably a bit sad that Tidjane is moving on but there is nothing fundamentally wrong with Prudential’s business,” he said.
Thiam’s decision to leave Prudential means the FTSE 100 will lose its first and only black chief executive, a status he played down, at a time when the government wants to see more women and ethnic minorities at the top of companies.
The blow of Thiam’s departure was cushioned by a strong set of results at Prudential. Operating profit for the year ended 31 December rose 14% to £3.2bn and the group increased its annual dividend by a bigger-than-expected 10% to 36.93p a share.
Operating profit in Asia increased 16% to £1.05bn, while profit at Prudential’s Jackson National subsidiary in the US jumped 21% to £1.4bn. Prudential shares later recovered some of their earlier loss, trading 1.6% lower at £16.37.
Thiam is highly regarded, despite a sometimes bumpy reign at Prudential. His handling of the failed bid for the Asian life assurance arm of AIG in 2010 prompted calls for him to quit and brought personal censure from the City regulator three years later.
Thiam said. “I’m really pleased to be able to step down at a time when everything is going well. It’s a rare privilege for a CEO and I’m very fortunate.”
Paul Manduca, Prudential’s chairman, said the board understood Thiam’s “ desire to take on a new challenge with another global leader in a different part of the financial services sector”.
Manduca said Prudential had prepared for Thiam’s possible departure and had used a headhunter to assess external and internal candidates.
“We hope we will be in a position to announce a new CEO very shortly,” he said. Mike Wells, the head of Prudential’s US operations, is regarded as the leading candidate.
Credit Suisse said its present boss, Brady Dougan, would leave at the end of June. Dougan became chief executive of Credit Suisse in 2007 and steered the bank through the financial crisis.
However, his position came under pressure last year when Credit Suisse pleaded guilty to charges that it helped American citizens evade taxes, becoming the first bank in more than a decade to admit to a crime in the US.
Credit Suisse agreed to pay $2.6bn (£1.7bn) as part of the settlement, as Dougan blamed the scandal on a small number of Switzerland-based bankers who “skirted the bank’s controls”.
Thiam will have to make decisions about Credit Suisse’s presence in investment banking – a business in which its Swiss rival UBS has scaled back sharply – and will face a $10bn lawsuit over the sale of mortgage-backed securities before the financial crisis.
A City fund manager said: “He has been around long enough to understand what he’s getting himself into and what is needed to change the culture in an organisation, which is what is needed at investment banks. A lot of the issues are to do with dealing with regulators and politicians as well as running the business.”
Thiam has been courted by politicians and has extensive contacts outside business. He served on the former British prime minister Tony Blair’s Commission for Africa and picked up a Légion d’honneur, the equivalent of a knighthood, from the French government.
This article was written by Sean Farrell, for theguardian.com on Tuesday 10th March 2015 16.34 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010