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Tidjane Thiam joined Credit Suisse to revive Switzerland’s second-largest bank. As he departs four years later, finews.asia takes stock.

2019 turned out to be the best year of Tidjane Thiam's reign over Credit Suisse. But the record profit was skewed by a number of one-off effects. The bank is still paying for what went wrong a decade ago – a painful reminder of the financial crisis. It took provisions of 623 million francs in 2019 for that purpose.

But equally, Thiam got a boost from a number of one-off items: the divestment of properties and Investlab as well as a revaluation of its stake in SIX, the stock exchange operator. The three together added more than a billion francs to the bank’s balance sheet.

Gottstein’s Challenge

It showed that the bank still faces challenges, despite being able to increase earnings across the three main divisions Swiss Universal Bank, International Wealth Management and Asia Pacific. If it is to achieve the profitability targets under new chief Thomas Gottstein, it will have to find a way of boosting growth without adding to its cost base.

As Thiam is now leaving the company in the hands of Gottstein, finews.asia takes stock of how well he did.

1. Capital

Credit Suisse was so starved of its cushion when Thiam arrived that it considered listing a chunk of its crown jewel. Instead, Thiam conducted two cash calls in short order, taking in a breathtaking 10 billion francs in just 18 months. Now, Credit Suisse is running on 12.7 percent of the toughest type of capital – a comfortable regulatory measure (UBS’ 13.7 percent is virtually untouchable). However, the Credit Suisse metric leaves little room to do more than buy back shares – effectively mopping up some of what it flooded the market with back in 2015 and 2017. Larger deals for growth, for example, are still out of the question.

2. Spending… On Itself

Thiam ran for the Credit Suisse on a spending cuts platform – and delivered. Over four years, he slashed the Swiss bank’s overall costs by one-quarter, to 17.4 billion Swiss francs. But Credit Suisse has always been a “spendy” bank when times are good – and the fourth quarter was no different. Compensation and benefits spiked by 21 percent in the three months as Credit Suisse topped up year-end bonus pots. Presumably, the bank’s annual report next month will also reveal details of Thiam’s financial kiss-off too.