Mühlemann throws in the towel

Mühlemann has been dogged by a succession of negative headlines Keystone

Lukas Mühlemann is to step down as CEO of the Credit Suisse Group at the end of the year.

This content was published on September 19, 2002 - 16:53

Thursday's announcement came nearly three months after Mühlemann gave up his double mandate and announced his resignation as the group's chairman.

In a statement Credit Suisse Group announced that Walter B Kielholz, the CEO of Swiss Re, would succeed Mühlemann as chairman as of January 1 2003.

Mühlemann expressed his regrets and said he was deeply sorry to leave the Credit Suisse Group.

"The decision to step down as both chairman and CEO by the end of this year has not been an easy one for me to make," he said.

"I care deeply about Credit Suisse Group and the people who work here. By taking this step, I hope to better position Credit Suisse Group for future success by removing any questions surrounding my leadership of the company."

The chairman of the Swiss Bankers' Association, Georg Krayer, told swissinfo he regretted Mühlemann's decision.

"I think it's sad for him as a person because it means that somebody who was responsible for a big and important institute with personal goals has to realise that he couldn't fulfill the promises and reach his goals."

Increasing pressure

The 52-year-old, who is stepping down after five years at the helm, has come under increasing pressure after a string of negative headlines within the CS Group.

These include his role as board member of the collapsed Swissair, his membership on the board of a controversial bank in Argentina and the business relationship with Swiss financier Martin Ebner, who has suffered a reversal of fortune at the stock market.

Mühlemann also came under fire in August when the group announced a second quarter net loss of SFr579 million ($386 million), which was mainly blamed on the poor performance of its Winterthur insurance business.

The result was in strong contrast to Credit Suisse's main rival, UBS, which reported a second quarter net profit of SFr1.331 billion - down just four per cent compared with the same period of the previous year.

Share price

"It's just what the market had demanded," an equities trader was quoted as saying. "Now the board has finally reacted. You can't ignore the shareholder forever."

However, David Hussey, a senior European banks analyst at Barclays, told swissinfo that the future was by no means desperate.

"The group's reputation has taken a knock clearly. Mr Mühlemann's strategy has unravelled in the last few years.

"However, operating trends of the underlying business, if you exclude Winterthur, are actually turning around quite nicely and will continue to do so in the next few quarters. So I think Credit Suisse is on the mend."

The group also announced that Oswald J Grübel, CEO of Credit Suisse Financial Services, and John J Mack, CEO of Credit Suisse First Boston, will additionally become joint CEOs of the group as of the beginning of 2003.

Credit Suisse shares have fallen by over 50 per cent since of start of the year.

swissinfo with agencies

Key facts

Lukas Mühlemann steps down as the CS group's CEO.
Walter B Kielholz will replace him as of January 2003.
In August the group reported a second quarter net loss of SFr579 million.

End of insertion
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In compliance with the JTI standards

More: SWI certified by the Journalism Trust Initiative

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