Thomas Gottstein isn't mourning the cancelled IPO of his division. Instead, the CEO of Credit Suisse Switzerland has set his sights on the future, where the bank's credo is growth and savings in equal measure.
Cancelling the initial public offering of Credit Suisse’ (CS) Swiss division, the so-called Swiss Universal Bank, was the right thing to do, according to Chief Executive Thomas Gottstein. In an interview with «Basler Zeitung» (behind paywall), Gottstein says that the plan had always been devised as a means to improve the capital cushion of the bank as a whole.
After concluding litigation over mortgage securities and paying a fine, the bank's better option was to raise capital, Gottstein said.
Ambitious Growth Targets
In the interview, the 53-year-old voiced optimism for Credit Suisse in Switzerland, a position he had held ever since the former investment banker took responsibility for the division in 2015.
Gottstein has been given ambitious targets: the unit needs to generate a pretax profit of 2.3 billion Swiss francs by the year 2018, according to the strategic plan of the bank. That target stands even as others have been pruned back.
Last year, the Swiss unit made a profit before tax of 1.74 billion francs, and Gottstein plans to keep the rate of growth going. He is however aware of the fact that the bank is not the sole author of its fate – it is also reliant on favorable markets.
Cautious on Fintech Options
Still, CS Switzerland is on course. «We have been able to increase pretax profit for five successive quarters,» Gottstein said. «For the moment, nobody seems able to copy this.»
Gottstein responded with caution in respect to questions about possible acquisitions. «We are ready if there’s an opportunity, including in the area of fintechs,» he said. But a fintech acquisition first and foremost had to help the bank in terms of its technological development.
The banker assessed the competition arising from the fledgling industry in critical terms. While firms such as Apple or Google already had to be considered as serious competitors, they were still hardly regulated.
More Job Cuts in Store
Gottstein said that there is a need for all market participants to be subject to equal conditions, saying that it wasn’t okay if new entrants were able to sell mortgages online without any regulation applying while banks are highly regulated.
The Swiss unit boss announced that the bank would stick to its plan of saving 100 million francs a year, which would lead to further job cuts. The bank had so far managed to cut two-thirds of the 1,600 jobs slated for elimination in Switzerland – this means that Credit Suisse in Switzerland will have to ax at least another 500 jobs.
