He has repositioned Credit Suisse’ business model, implemented a harsh cost-cutting program and is about to report his first profit as head of the bank. And yet, there remains a lot of work to do for Tidjane Thiam.
On Thursday, Credit Suisse likely will present a decent enough quarterly report, putting the first annual profit for years within its grasp. And still, the current year has been a disaster – at least in respect to the share price. The stock has lost more than a quarter of its value since the beginning of the year and has fared even worse than the shares of arch-rival UBS.
Investors have had a torrid three-year period, during which the share price declined by a whopping 40 percent. Included of course are two capital increases requested by CEO Tidjane Thiam. He has been at the helm of Switzerland’s No. 2 since July 2015.
Banker of the Year
Despite the calamitous performance of the stock, «Euromoney», a U.K. trade journal, named him «Banker of the Year». The jury had argued with the success of his turnaround strategy.
Much like its smaller rival, UBS also has had a dreadful stock performance to grapple with both this year and over the past three years, a performance only marginally better than Credit Suisse’. But unlike Thiam, analysts and the media haven’t held back in their criticism of CEO Sergio Ermotti.
He concluded last week that the goals of his bank either hadn’t been understood or that the bank hadn’t been good enough at explaining its strategy.
Underperforming Stock
Thiam might yet face a similar fate as his colleague from across Paradeplatz if he doesn’t soon succeed in boosting the bank’s share price significantly. Turning around the fate of the share price will determine how he will be remembered once he’s moved on.
At the end of the day, investors will judge any bank CEO on the performance of their shares. In July 2015, CS shares cost 24 francs – today they traded below 13 francs. There’s some way to go for sure.
Fine Enough Performance
Thiam knows it’s possible to turn the fortunes around and has repeatedly said that the shares of Prudential had tripled during his time as head of the insurance company. He had joined the U.K.-based bank in 2009, when the shares had reached a low point.
On Thursday, Credit Suisse is expected to present a good set of figures for the third quarter, not least because UBS had done so well. Switzerland’s No. 1 had done better than expected.
Investor Day: New Targets in December
Thiam won’t show up on Thursday, but only answer a call from analysts.
More important will be how the bank will present itself on December 12 during its «Investor Day» in London. Thiam will be called upon to go public with a new set of targets for the bank after the completion of the three-year-plan presented in 2015.
