As the smorgasbord of European banks up for grabs emerges, Credit Suisse boss Tidjane Thiam isn't tempted to binge at the buffet.
White tablecloths cover the stand-up cocktail tables outside Credit Suisse's conference room near its Paradeplatz headquarters in Zurich. But inside the auditorium, CEO Tidjane Thiam says, «we're not hungry».
He's not referring to the carefully-prepared hor d'oeuvres Credit Suisse offers to journalists, investors, and analysts following results, but to the veritable smorgasbord of deals surfacing in European banking. Deutsche Bank is in talks with its smaller German rival Commerzbank, Unicredit is said to be interested, and UBS was linked to asset manager DWS (currently owned by battered Deutsche).
Outsider Switzerland
On Wednesday, Thiam voiced skepticism of such plans, especially ones centered in the eurozone. «It's important to understand that Switzerland is in Europe, but not part of the eurozone», the French-Ivorian executive said.
Thiam, who spent much of his executive career in the U.K., said it's no coincidence that Swiss banks as well as U.S. peers are relatively healthier than those in the eurozone. He also argued that organic growth – Credit Suisse hoovered up a whopping 35.8 billion Swiss francs ($35.1 billion) overall in the quarter – raises the bar for potential acquisitions.
Buying a $5 Billion Fine
Instead, Thiam referred to massive investments in compliance, including a tie-up with controversial spyware firm Palantir or paying bonuses for reporting fraudulent behavior by colleagues. Advances of this sort would be wiped out by a merger, he warned.
«The due diligence can be the best – you still can't rule out buying something which incurs a $5 billion fine later», he said. Thiam didn't mention that Credit Suisse can ill-afford a takeover. The bank has slashed spending in the last three years, and had to go hat in hand to investors for cash twice.
He is also buying back up to 1 billion francs in Credit Suisse shares, leaving little leeway to splash out elsewhere. Nevertheless, the CEO vowed to focus on growth again following the recently-concluded three-year revamp, while keeping a watchful eye on spending. Credit Suisse employees, whose ranks have thinned by more than 2,000 people since he arrived, will be taking him at his word.
