Tough love

30 November 2017 By Christopher Thompson Follow @CGAThompson

CEO Tidjane Thiam played down the Swiss bank’s capital markets business in a shareholder presentation on Nov. 30. Yet the unit brought in 45 percent of net revenue in the first nine months of 2017. Achieving double-digit return targets depends on Thiam finding more costs to cut.

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Credit Suisse on Nov. 30 announced it would cut costs beyond 2018 as chief executive Tidjane Thiam accelerates a restructuring that the Swiss lender says will be completed that year.

Ahead of an investor day the Zurich-based lender said it is aiming for a return on tangible equity of 10 percent to 11 percent in 2019 and 11 percent to 12 percent in 2020. The bank said it would maintain a common equity Tier 1 capital ratio of 12.5 percent from 2018-20.

Credit Suisse estimated its end-of-year cost base would be approximately 18 billion Swiss francs, below the bank’s target of 18.5 billion Swiss francs. The bank said it aims to operate with a total cost base of between 16.5 billion and 17 billion Swiss francs in 2019 and 2020.

Credit Suisse added that it had lowered 2019 expected pre-tax losses from its Strategic Resolution Unit, where unwanted assets are either run down or sold, from $800 million to around $500 million.

Credit Suisse shares were up 2.6 percent at 16.76 Swiss francs by 1000 GMT.

Context News

Credit Suisse on Nov. 30 announced it would cut costs beyond 2018 as chief executive Tidjane Thiam accelerates a restructuring that the Swiss lender says will be completed that year.

Credit Suisse added that it had lowered 2019 expected pre-tax losses from its Strategic Resolution Unit, where unwanted assets are either run down or sold, from $800 million to around $500 million.

Credit Suisse shares were up 2.6 percent at 16.76 Swiss francs by 1000 GMT.

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