Tidjane Thiam has quit as Credit Suisse chief executive after a spying scandal that has hit the reputation of one of Europe’s largest banks and shocked Switzerland’s financial community.

Thomas Gottstein, who is head of the Swiss business at Credit Suisse, will take over from Thiam, the Zurich-based lender said on Friday. His departure ends a conflict with chairman Urs Rohner after revelations that the bank had snooped on former executives raised questions over its culture.

Thiam reiterated that he knew nothing of these activities.

“I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place,” Thiam said in the bank’s statement.

Thiam’s resignation, effective from February 14 after the presentation of fourth-quarter and full-year 2019 results, came at a board meeting on Thursday.

During the meeting in Zurich directors backed Rohner despite calls from Swiss investment adviser Ethos Foundation for him to quit.

The espionage involving Credit Suisse surfaced in September when former star wealth manager Iqbal Khan, after defecting to rival UBS, confronted a private detective who was following him and his wife through Zurich.

A spokesman for Switzerland’s market supervisor FINMA said it was important that calm was restored to the bank. The watchdog said it was continuing its investigation into the scandal.

Thiam’s exit, ending a near five-year run as Credit Suisse CEO, runs the risk of irking international investors who had backed him, not Rohner.

“A period of instability will ensue as Gottstein attempts to lay the foundations for further growth. We would assume investor discontent following the change, with any fall-out unknown at this stage,” KBW analysts said.

This was reflected in a 5 per cent drop in the bank’s share price in early trade. It was just 0.6 per cent lower by 1513 GMT.

Credit Suisse’s board said that Rohner had its backing to complete his term until April 2021.

Thiam, 57, was appointed as CEO in 2015, having never previously worked for a bank. At Credit Suisse, the ex-Prudential boss focused on cutting costs, reducing risk, scaling back investment banking to focus more on wealth management, and strengthening its balance sheet.

Engineering that turnaround led to three years of consecutive losses, but the bank returned to profit in 2018, leading to plaudits for the former Ivory Coast government minister and McKinsey management consultant.

However, what the bank initially described as a rogue spying case run by then-Chief Operating Officer Pierre-Olivier Bouee widened as details emerged of other instances of surveillance.

Swiss financial supervisor FINMA is investigating after the bank acknowledged that it had tailed former human resources head Peter Goerke. Gottstein had been flagged by analysts as a potential successor to Thiam.