Credit Suisse has tweaked its one-year-old strategy at a keenly-anticipated investor day: CEO Tidjane Thiam is lowering various profit targets and deepening billion-franc cost cuts.
Tidjane Thiam faces investors on Wednesday in London – and is forced into revising his 2018 targets for the second time, after massive investment banking write-downs forced a renewed push on cost-cutting earlier this year.
Credit Suisse said it will redouble efforts to slash spending across the bank’s activities.
1 Billion Sfr Savings
The Zurich-based bank said its now targets a cost base of less than 17 billion Swiss francs, from less than 18 billion previously, a move which was widely expected by analysts. The bank hiked its net cost-cutting target by 1 billion to 4.2 billion francs.
More importantly, the bank said it cannot meet profit targets laid out last October due to difficult market conditions.
Its international private bank, IWM, now targets pre-tax profit of 1.8 billion francs, from 2.1 billion when Thiam’s restructuring was announced last year.
Asia-Pacific, the bank’s most important growth market, now targets profit of 1.6 billion, which is 500 million francs lower than the original target. The bank left Asia private bank target untouched at 700 million francs.
Capital Discipline
Credit Suisse confirmed a return on capital target of 10 to 15 percent for its battered markets and trading division. It aims for 15 to 20 percent in its investment banking and capital markets division.
The bank’s undesirable asset division, strategic resolution unit or SRU, is expected to narrow losses to $1.4 billion by the end of 2018 and to $800 million in three years.
Credit Suisse’s Swiss bank unit maintained a profit target of 2.3 billion francs by 2018. The healthy target forms the base case for the unit’s public listing, which the bank says could happen as soon as mid-next year.
Thiam vowed discipline on Credit Suisse’s capital position, which rose to 12 percent last quarter.
More to follow
