Credit Suisse CEO Expects Challenging Third Quarter
September 27 2016 - 7:33AM
Dow Jones News
By John Letzing
Credit Suisse Group AG has faced ongoing challenges in the third
quarter, Chief Executive Tidjane Thiam said Tuesday, as the
Zurich-based bank moves ahead with thousands of job cuts planned
for the end of this year.
Speaking at an investment conference in London, Mr. Thiam said
the equities business at Credit Suisse's investment bank is likely
to make a relatively weak contribution to overall results in the
third quarter--as it had in the second quarter, when revenue from
equities businesses declined 10% compared with the same period a
year earlier.
The same trend of depressed client activity in the second
quarter "has continued" into the current period, Mr. Thiam said.
Credit Suisse is expected to report third-quarter results on Nov.
3.
Mr. Thiam said the bank expects to report outflows at its
Switzerland-based wealth management unit, as Credit Suisse culls
its ties with some external asset managers in a bid to "only keep
the desirable ones."
"It's risk reduction," he said.
Credit Suisse has previously said it expects to incur about 5
billion Swiss francs ($5.2 billion) in outflows this year as part
of the so-called "regularization" process of having clients come
clean to local tax authorities about the undeclared assets held in
Credit Suisse accounts. "I think it's about 2 billion [francs], so
far," Mr. Thiam said.
Mr. Thiam said Credit Suisse expects to shed some 1,200 jobs by
the end of this year--which come on top of 4,800 job cuts already
made as a part of Mr. Thiam's sweeping overhaul, which is intended
to de-emphasize its investment banking operations while bolstering
wealth management businesses in Asia and Switzerland.
He suggested that transaction levels among clients may actually
have been lower in the third quarter than in the second quarter,
when there had been a flurry of trading around the U.K.'s surprise
vote to leave the European Union.
However, Mr. Thiam cited recent positives for the bank,
including asset inflows for Credit Suisse's business in Asia, where
it has been bulking up on private bankers. He noted that Credit
Suisse's investment bankers have had roles in some of the largest
transactions of the year, including China National Chemical Corp.'s
acquisition of Swiss pesticide firm Syngenta AG.
Write to John Letzing at john.letzing@wsj.com
(END) Dow Jones Newswires
September 27, 2016 07:18 ET (11:18 GMT)
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