Credit Suisse is looking to build on the final round of its turnaround strategy, and Chief Executive Tidjane Thiam is using its Investor Day to explain why this promises in the future to be good news for shareholders.
Unlike his previous appearance before investors in London a year ago, Credit Suisse's CEO Tidjane Thiam this Thursday won't be using the occasion to reign in the final leg of the bank's three-year «Strategic adjustment» targets. Quite the contrary.
Switzerland's second-largest bank said in a statement Thursday that it's well placed to exceed certain goals, especially as far as savings are concerned. Thus the bank aims to undercut its 2017 cost-basis target of 18.5 billion Swiss francs, with the expenditures to be cut to 17 billion francs in 2018.
No splitting of bank activities
Thiam says Credit Suisse will operate on a cost-basis of 16.5 to 17 billion francs between 2019 und 2020, according to the statement. To satisfy further investor interest in what lies beyond the turnaround, Thiam insists there is no plan to split the bank as «our strategy is working».
Credit Suisse will stick to its twin-pillar Investmentbank and Asset Management model, with the latter business getting 20 percent of the accumulated capital for reinvestment.
Special dividends and share buybacks
A further 30 percent will be used to stabilize the balance sheet while the remaining 50 percent will be passed on to shareholders, largely in the form of special dividends and share buybacks.
The bank is aiming for a core-capital rate of 12.5 percent between 2018 and 2020, which would equate to the valid Basel-III-Rule by the end of 2019, the statement said.
For the coming year the CEO has set the following goals for the bank's divisions:
• In International Wealth Management a pre-tax profit goal of 1.8 billion francs has been set. In the strategic adjustment plan of October 2015, Thiam had been striving for a target of 2.1 billion francs.
• In the key Asia-Pacific growth region, the pre-tax profit goal of 1.6 billion francs has been maintained, though the profit target for the asset management business has been raised from 700 to 850 million francs.
• In the Global Markets trading unit the return on regulatory capital has been kept at 10 to 15 percent.
• In the Investment Banking & Capital Markets division a return on regulatory capital of 15 to 20 percent has been set.
• The pre-tax loss in the Developments Unit (SRU) after 2018 will be further reduced from $0.8 billion to $0.5 billion.
• The profit target for the Swiss Universal Bank will be kept at 2.3 billion francs by the end of 2018, even though the unit has seen a slowdown in business.
