Lender Launches Buyback -- WSJ
December 13 2018 - 3:02AM
Dow Jones News
Credit Suisse to purchase $3 billion of its shares as it tries
to shore up confidence
By Brian Blackstone
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 13, 2018).
ZURICH -- Credit Suisse Group AG on Wednesday moved to shore up
confidence among investors by launching a share buyback of up to 3
billion Swiss francs ($3 billion) over the next two years, as the
Swiss banking giant confronts a steep drop in its share price.
The Swiss banking giant will buy between 1 billion and 1.5
billion francs in shares next year, it said ahead of its investor
day seminar in London. It added it expects to buy a similar amount
in 2020, subject to market conditions, and will raise its dividend
5% annually starting next year.
Analysts said the share buyback was in line with their
expectations.
Wednesday's meeting with analysts and investors came at the end
of a three-year restructuring launched by Chief Executive Tidjane
Thiam, who joined the bank in mid-2015. Under the revamp, Credit
Suisse geared its business toward wealth management while
streamlining its investment-banking unit.
After three straight annual losses through 2017 -- brought on by
restructuring charges, legal settlements and, last year, U.S.
corporate tax changes -- the bank is on track to turn a profit this
year. "The actions taken during the restructuring mean that the
bank is now more resilient in the face of market turbulence," Mr.
Thiam said Wednesday.
Still, after rising sharply from the middle of 2016 through last
year, Credit Suisse's share price has fallen by more than one third
since the start of 2018. Shares of its Swiss rival UBS Group AG
have declined by a slightly smaller rate.
Swiss banks have struggled this year as they continued to shift
their business models toward managing money for wealthy clients
around the world. The costs associated with these strategic changes
have been exacerbated by negative interest rates in Switzerland --
which have cost the banks more than 5 billion francs in the past
four years -- and tight regulatory requirements that have capped
growth in parts of their businesses.
Doubts about Credit Suisse's global markets unit, which posted a
pretax loss of 96 million francs last quarter, have added to
pressure on its share price.
The bank said it sees a positive long-term outlook for the
global economy, "albeit at a lower level," and that it was mindful
of "short-term headwinds" from trade tensions and changes to
central banks' policies.
Write to Brian Blackstone at brian.blackstone@wsj.com
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December 13, 2018 02:47 ET (07:47 GMT)
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