Credit Suisse Expects To Achieve Targets After Three-Year Restructuring Plan

Tom Burroughes

13 December 2018

expects to achieve its goals for this year after its three-year restructuring programme, predicting to log reported pre-tax income between SFr3.2 million ($3.22 million) to €3.4 billion.

The Swiss bank, which like several of its peers has had to revamp operations to bolster profits, and has made a push towards the Asian wealth market, yesterday confirmed its return on tangible equity target for 2019 at 11 per cent, 12 per cent for 2020, and 12 per cent for 20121.

The Zurich-listed bank said that it expected to distribute at least half of net income for 2019 and 2020 to shareholders. Credit Suisse has approved a share buyback in 2019 of SFr1.5 billion and expects to buy back at least SFr1.0 billion next year. A similar buyback programme is expected in the following year.

“The actions taken during the restructuring mean that the bank is now more resilient in the face of market turbulence. Those actions included dealing with legacy issues, reallocating capital towards our more stable, capital efficient and profitable Wealth Management businesses, and away from our more volatile markets activities. In parallel, we have strengthened the bank’s capital position, reduced our risks, and invested in strengthening our regulatory and compliance functions,” Tidjane Thiam, chief executive of Credit Suisse, said.

“Throughout the restructuring we have been able to generate both significant revenue growth and significant cost savings, achieving positive operating leverage. We expect our adjusted profits for our core businesses this year to be more than 20 per cent above our 2015 profits, with 41 per cent less risk. We are confident that going forward, growth in wealth management, primarily through more stable revenue sources of net interest income and recurring fees, will allow us to continue to drive group returns higher,” Thiam said.

“As a result of known actions that are under our control, we expect to achieve at least a 10 per cent RoTE in 2019,” he said.