StockBeat: Thiam Set to Survive Spy Drama at Credit Suisse

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© Reuters. © Reuters. — Credit Suisse (SIX:) was the second-best performing bank stock in Europe after early trading on Monday, as reports suggested that the group’s board was willing to back CEO Tidjane Thiam over an unseemly spying scandal that has led to much clutching of pearls and dropped monocles in the staid world of Swiss banking.

The Financial Times and Bloomberg both reported that the board would not look to remove Thiam, although the FT noted that the board had not yet fully processed an internal report into the episode.

Thiam has notched up some notable successes in his tenure at the bank so far but failed to overcome the headwinds of low interest rates and trade conflicts that have held back its lending business and complicated the business of managing the wealth of China’s richest men and women.

Thiam’s record is under scrutiny for his use of detectives to monitor Khan and stop him luring away other key members of his team after Khan agreed to join CS’s arch-rival UBS (NYSE:) last month. Khan defected after appearing to lose an internal power struggle with Thiam. He’s expected to take up his duties on Tuesday, UBS chairman Axel Weber told Bloomberg last week.

CS wasn’t immediately able to comment on the FT and Bloomberg reports.

UBS could certainly do with a little bit of Khan’s magic. Its stock is down 7% so far this year, while Credit Suisse’s is up 14%. And Thiam’s house also looks better on a three-year comparison, up 3% while UBS has fallen 14%.

In part, that’s because UBS moved faster and more radically to cut its investment bank division after the regulatory backlash to the financial crisis, and focus on the more predictable wealth management business. It has lost momentum in recent months, losing $2 billion through net client withdrawals in the second quarter. Thiam’s restructuring has been a more recent affair.

Elsewhere Monday, it was a quiet opening to the week for European stocks, despite a reported upgrade from JPMorgan (NYSE:) analysts. The was effectively unchanged at 391.82 by 5:30 AM ET (0930 GMT), while the was also unchanged. The U.K. was down 0.2%

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