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.

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Tough love

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