Credit Suisse Trims Targets But Says Revamp is Working
December 07 2016 - 3:00AM
Dow Jones News
ZURICH—Credit Suisse Group AG said market conditions have forced
it to dial back expectations that were set last year as part of a
restructuring.
Zurich-based Credit Suisse said Wednesday that "given the
challenging market conditions that we are facing," the bank is
lowering the targets set for its investment banking and
asset-management businesses. However, goals set for its wealth
management units remain unchanged, it said.
Credit Suisse is in the midst of an overhaul planned by Chief
Executive Tidjane Thiam, who took office in July 2015. His
restructuring, which has involved focusing on markets in
Switzerland and Asia while emphasizing wealth management at the
expense of investment banking, has been hindered by swooning
markets and a loss of confidence among many investors.
Shares of Credit Suisse have fallen about 40% since Mr. Thiam
outlined his plans for a turnaround in October 2015.
Targets set at that time by Mr. Thiam for 2018 included
increasing pretax profit at the international wealth management
unit to 2.1 billion Swiss francs ($2.1 billion). The target for the
unit, which includes asset management, has been lowered to 1.8
billion francs, Credit Suisse said Wednesday.
While targets for the wealth management business in Asia remain
unchanged, Credit Suisse said worse-than-expected investment
banking results in the region mean that instead of more than
doubling pretax profit in Asia to 2.1 billion francs by 2018—as
compared with 2014—the bank now expects to reach 1.6 billion francs
in pretax profit.
The target for increasing pretax profit at Credit Suisse's
Switzerland-based operation to 2.3 billion francs by 2018—from 1.6
billion francs in 2014—remains unchanged.
Credit Suisse also said Wednesday that it has ramped up efforts
to cut costs and now expects the cost of running the bank to be
less than 17 billion francs by 2018, compared with a previous
target of less than 18 billion francs.
Write to John Letzing at john.letzing@wsj.com
(END) Dow Jones Newswires
December 07, 2016 02:45 ET (07:45 GMT)
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