The bank set out forecasts and updated strategy at an investor day presentation. One theme is how negative Swiss official interest rates are causing - it and other banks - margin pressure. Comments also revealed subtly different performances across different business lines and geographic segments.

Credit Suisse, which has reiterated how it intends to boost returns on equity in 2020, said that its business performance in the final quarter of 2019 has continued to improve from the same point a year earlier. Meanwhile, it is considering selling property to offset the pain caused by negative official Swiss interest rates. 

The Zurich-listed bank set out various accomplishments so far this year – many of them previously reported – and gave an upbeat outlook assessment for next year. 

Examining the reported pre-tax income trends of Credit Suisse’s businesses in more detail for the fourth quarter to date, the firm said that its Swiss Universal Bank was being affected by continued pressures from Switzerland’s negative official interest rates. The bank said it has “identified opportunities to offset these pressures through real estate sales, at least one of which we expect to close in the fourth quarter”.

As explained by the Swiss Bankers Association a few weeks ago, half a decade of negative official Swiss rates (-0.75 per cent) has hit margins, inflated real estate values and prompted worries about a property bubble. Along with rising regulations, eroding bank secrecy and global competition, they explain why the fragmented Swiss banking industry has consolidated in recent years. 

Stable
As far as its international wealth management arm is concerned, performance in Q4 so far is “stable”, while Asia-Pacific and global markets businesses were “showing significantly better performances” from the fourth quarter of last year. 

Credit Suisse said it expects a reported return on tangible equity of more than 8 per cent for the full calendar year of 2019. For next year, it aims to chalk up a return on tangible equity of about 10 per cent.

The bank, which is Switzzerland’s second-largest lender, said it expects at least half of net income to be paid out in 2020 through dividends and share buybacks; there is an approved buyback of Credit Suisse ordinary shares of up to SFr1.5 billion ($1.52 billion) for 2020, with at least SFr1.0 billion expected in 2020.

Reflecting on recent figures, the bank said: “Between the end of 2015 and the end of 3Q19, we had attracted SFr193 billion of net new assets across the group as a whole. We also achieved a compound annual growth rate of 7 per cent for our wealth management AuM over those four years. We have delivered consistent asset inflows by being a trusted advisor. Thanks to the strong collaboration among our wealth management, markets and investment banking teams, we provide institutional quality solutions and capabilities to our ultra-high net worth (UHNW) and entrepreneur clients.”

“As we continue to further scale our record wealth management AuM of SFr802 billion, we are compounding the growth of our more stable and recurring revenue streams,” it added.