Credit Suisse is making a comeback, but a spying scandal drags down its outlook

A spying scandal at Credit Suisse, which led last week to the surprise resignation of chief executive Tidjane Thiam, is turning into the banking world’s biggest Rohrschach test, an assembly of data points on to which viewers can effortlessly project their inner feelings and thoughts.

For some, it’s a witch hunt motivated by petty jealousies with a twist of racism. For others, it’s about rescuing the good name and culture of a storied institution before it’s damaged beyond repair by a shabby corporate espionage saga.

The truth remains frustratingly out of reach, due to the gaping holes in the explanations so far from the protagonists for their actions—or inaction. What is almost a certainty: Credit Suisse’s Feb. 13 earnings call, scheduled to be Thiam’s last act at CS, ought to be a cracker, at least by the standards of the genre.

David Herro of U.S.-based Harris Associates, the bank’s largest active shareholder with around 8.4%, raged last week that Thiam had been the victim of an “orchestrated” campaign in the Swiss media, which he insinuated was motivated by racism. Thiam, the son of a former government minister in Cote d’Ivoire, is arguably the most famous black face in the world of business.

“It either seems envy from the competitors, or perhaps there’s something else, given that, you know, Mr. Thiam looks a bit different from the typical Swiss banker,” Harris told Bloomberg last week in an emotional call-in interview, adding that he thought it should have been chairman Urs Rohner to take responsibility for the debacle.

“Absurd,” countered Christian Dorer, editor-in-chief of the tabloid Blick, for years the authentic voice of prickly Swiss nationalism. “No Swiss, no German or American CEO could have survived the spying scandal undamaged.”

In an interview this weekend with a Swiss media outlet, Rohner himself condemned “in the strongest possible terms” those critics who might suggest race played a factor in Thiam’s resignation. It did not have “any influence on the decisions of the board of directors,” he said.

Watching the detectives

Thiam’s departure came less than two months after it emerged that a second senior executive, HR director Peter Goerke, had been placed under covert surveillance by senior management two years ago. That revelation obliterated the bank’s claim that a separate surveillance campaign into the man then seen as Thiam’s “crown prince,” wealth management Iqbal Khan, was a one-off ordered by a rogue chief operating officer. Switzerland’s financial regulator Finma immediately announced an investigation, which it expects to last several months.

Reached by Fortune, Credit Suisse declined to comment on the matter.

CS’s supervisory board had eagerly accepted the findings of Homburger, a local law firm it hired to look into the affair, which said last year that COO Pierre-Olivier Bouée had been responsible for hiring private detectives to tail Khan when the star banker left the fold last summer for arch-rival UBS. Rohner, meanwhile, has never explained why he allowed Khan to start work at the bank’s biggest competitor without a lengthy period of gardening leave, which would have been the usual procedure.

Homburger’s conclusions never convinced the skeptics who felt that Bouée–who followed Thiam to Credit Suisse from their previous employer Prudential—would not have risked so much without authorization from higher up. Many suspected a cover-up, and the drama soon became a huge distraction at the bank.

“It remained Thiam’s secret, how his most trusted lieutenant could have ordered surveillance without he himself being aware,” Blick’s Dorer summed up on Sunday. “The price: no one believed him any more.”

Thiam repeated on Friday in a press release that he knew nothing of either surveillance operation.

Overseeing a comeback

Thiam already had a track record for overstepping the mark before arriving at CS: while at Prudential, he had been censured by the U.K. regulator for not telling it of his plans to buy the Asian arm of AIG back in 2010. Prudential had been fined 30 million pounds ($39 million).

But Credit Suisse’s board was loath to risk losing a CEO who had seemingly fixed most of the bank’s problems over the previous four years. He cut a bloated and risky investment bank, raised capital buffers and successfully pivoted to the more stable business of wealth management.

Back in October, when the bank first acknowledged the spying scandal, chairman Rohner was quick to sign up to Homburger’s “rogue COO” thesis, laying the blame squarely on Thiam’s lieutenant. But Bouee, who initially agreed to go quietly, is now considering suing CS, according to the Swiss news site finews.ch.

Further allegations of unethical, if not unsavory, behavior continued to dribble out, painting an increasingly detailed picture of an overbearing management culture. The bank’s denials fell flat. So did a tin-eared response by Thiam, who launched his own Instagram account to get his side of the story across: three paragraphs complaining of “false and defamatory” articles jammed in between a dozen shots of him surrounded by CS acolytes with forced grins, or hob-nobbing with the likes of Xi Jinping, rapper Jaden Smith or Queen Maxima of the Netherlands. The indispensable leader, and don’t you (all 8,383 followers, anyhow) forget it.

Only, CS’s share price performance under Thiam did not, ultimately, support that star billing. Since he took over, Credit Suisse stock has fallen 52%, compared to a loss of only 43% for the Stoxx 600 banks index during that period. Negative interest rates and global trade conflicts have made life miserable for most European banks since 2015.

After a company press release on Friday that glossed over all these tensions with some warm and uplifting phrases, Thiam leaves the bank with his reputation open to debate. But the price he’ll pay in escaping without official blame for the spying scandal will be to see the credit for the bank’s turnaround going to his successor and protégé Thomas Gottstein.

As his friend Bouée could tell him—there are worse fates.