(Bloomberg) -- The rift was an open secret for months in the corridors of Credit Suisse Group AG’s imposing central Zurich headquarters before it spilled into the outside world.
Iqbal Khan, a rising star at the bank’s key wealth-management business, abruptly left last week. Seen as a potential successor to Chief Executive Officer Tidjane Thiam, he’d enjoyed a rapid ascent to the highest echelons of the bank, making a name for himself as both an effective people and client manager.
But his ambitions put him on a collision course with Thiam, who’s in no hurry to leave the bank after a grueling three-year restructuring plan. Khan started exploring possibilities outside the lender -- holding talks with banks including UBS Group AG and Julius Baer Group Ltd., people with knowledge of the matter said -- leading to heightened tensions with the CEO.
His departure was the culmination of a high-stakes poker game that pitted Thiam, 56, against one of his most ambitious executives in a power struggle that animated talk around the Paradeplatz square at the heart of Zurich’s financial district. The CEO may now face questions over the loss of a well-liked energetic banker and the risk of some private bankers following their boss. It also leaves Khan without a job. He’s reviewing offers, according to people familiar, who asked not to be identified discussing personnel matters.
In recent days, Credit Suisse sought to smooth over the tensions as it faced awkward questions about Khan’s departure and his replacement with a relative unknown. Khan dropped in on his successor‘s first town hall meeting last week to applause. In a call with the firm’s top international wealth-management executives, Thiam praised Khan.
See also: Credit Suisse wealth head Khan in talks with banks on next move
“It’s definitely a loss for Credit Suisse given International Wealth Management‘s positive transition over the recent years, leaving us somewhat concerned performance in the division may have peaked,” Thomas Hallett, a bank analyst at Keefe, Bruyette & Woods in London, said in a phone interview.
Khan declined to comment, while a Credit Suisse spokesman said, “We thank Iqbal for the strong results he delivered during his time leading IWM and wish him well.”
The wealth-management unit was crucial to Thiam’s turnaround because it offered a growth story to tell alongside painful cuts on the trading floor. Still, Khan is gambling by walking away from the job, where he was among contenders to eventually replace Thiam.
Yet that throw of the dice is exactly what Khan is known for, the people said. Born in Pakistan, he immigrated to Switzerland at age 12 and started his career as an auditor before moving into wealth management.
Some associates described Khan as confident, even overly so. Others said he is hands-on and approachable, a manager who spent weeks on the shop floor to understand how the business works.
The banker is known for waking up in the middle of the night to take conference calls, early morning gym sessions and smooth investor presentations. Executives who worked with Khan describe him as thoughtful and entertaining, but also as someone capable of shaking up the bank’s at times staid and change-resistant hierarchy.
Rising from auditor to head of a $400 billion private-banking division within two years, Khan shocked peers with the speed of his ascent. He became CEO of International Wealth Management before his 40th birthday as part of a restructuring project that broke up the bank into regional units, dismantling the power base of longstanding executives. Khan took over a newly created division that housed wealth management for Europe, Emerging Europe and Latin America, as well as asset management.
He drew attention from his superiors by re-fashioning the hodgepodge of regions into the lender’s fastest-growing unit.
His area was experiencing limited economic expansion but still contributed 45.4 billion Swiss francs ($45.7 billion) in net new assets from 2016 and 2018 -- almost as much as fast-growing Asia. Those inflows were accompanied by 80% profit growth during that period and increasing margins in an industry under pressure from low interest rates and higher costs.
A key part of his growth strategy was selling structured products to wealthy individuals, using the banks balance sheet to provide loans for rich clients and building relations between Credit Suisse’s trading unit and wealth management.
“Everybody thought IWM is the residual when we started,” Khan said last year. “What is this? Which regions does it cover? Who is this Iqbal? Then in 2017 we shot the lights out. I had the time of my life.”
One of Khan’s first coups was hiring more than a dozen relationship managers in Mexico from crosstown rival UBS Group AG in April 2016, flying there economy to get the deal done.
Even though he had little experience with private-banking customers prior to joining Credit Suisse, Khan managed to win over billionaires in meetings, according to one contemporary who attended ultra-high-net-worth client meetings with him. Any hesitation about his abilities with such clients dissolves quickly after watching him at work, the person said.
At an event held by a competing bank where he was present, Khan recognized and helped a wealthy individual who wasn’t given a chair. He also offered career advice to the son of a Russian client who didn’t know what to do with his life and sent his condolences to a widow after relationship managers failed to do that.
In recent months, Khan‘s relationship with Thiam soured. When a corporate reorganization came in February, Khan‘s brief stayed the same, even as two colleagues were elevated to the executive committee. Tensions mounted as Khan’s name surfaced in media reports as a candidate to replace Bernhard Hodler as head of Julius Baer. That job eventually went to Philipp Rickenbacher, a little-known internal candidate.
Khan held informal discussions with rivals including Julius Baer Ltd. and UBS and a third unidentified global bank, according to the people. When media reports surfaced linking him to Julius Baer, Khan didn’t deny them, to the surprise of some in the bank and externally.
While rumors swirled outside the bank, Khan threw himself into work, personally negotiating the disposal of Credit Suisse‘s fund-administration platform Investlab to Allfunds last month.
Now, all eyes are on his next move. Given the relative paucity of bankers in Zurich considered candidates for top jobs, that still makes Khan a sought-after man, said one executive recruiter.
To contact the reporters on this story: Patrick Winters in Zurich at firstname.lastname@example.org;Jan-Henrik Förster in London at email@example.com
To contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, Steven Crabill
©2019 Bloomberg L.P.