Credit Suisse Sees End of Restructuring in 2018 and Targets 50% Payout -- Update
November 30 2017 - 6:02AM
Dow Jones News
By Pietro Lombardi
Credit Suisse Group AG (CSGN.EB) said on Thursday it plans to
complete its group restructuring in 2018 and gave new targets for
coming years.
The bank anticipates that it will meet its 2018 target of 700
million Swiss francs ($710.9 million) in adjusted pretax profit at
its wealth-management and connected business in Asia-Pacific by the
end of 2017, prompting it to raise its 2018 target to CHF850
million.
For the group, Credit Suisse set targets of its return on
tangible equity, expecting between 10% and 11% in 2019, and 11% and
12% in 2020.
Credit Suisse has in recent years pursued a strategic shift,
putting greater emphasis on its wealth-management operations and
streamlining its investment banking unit. Earlier this month, two
years into the overhaul, Credit Suisse reported a sharp rise in
third-quarter profit on strong growth in wealth management. Assets
under management hit a record high last quarter of CHF751
billion.
"The biggest opportunity we see today is wealth management,"
Chief Executive Tidjane Thiam said at the company's investor day on
Thursday. "Our focus on wealth-management is paying off as the
franchise has delivered strong broad-based and profitable
growth."
The company expects to outdo its 2017 goal of costs below
CHF18.5 billion. It now expects a total cost base of about CHF18
billion and confirmed its 2018 target of less than CHF17 billion in
costs. This should decline to between CHF16.5 billion and CHF17
billion in 2019 and 2020, it said.
"We also aim to increase returns to shareholders and plan to
distribute 50% of net income earned to them primarily through share
buybacks or special dividends," the bank said.
Credit Suisse said it is confident it will complete the
wind-down of its strategic resolution unit, designed to wind down
unwanted assets. The company cut its 2019 adjusted pretax loss
target for the unit to about $500 million from $800 million.
"The scale of our legacy business activities in the Strategic
Resolution Unit and the related drag on earnings have been
significantly reduced," it said.
Credit Suisse said trading conditions in the fourth quarter in
its more market-dependent businesses are broadly similar to those
in the previous quarter. Low volatility and some recent widening of
spreads in the high-yield market "weighs negatively on the
performance" of the bank's global markets business and APAC
markets, it said.
Credit Suisse confirmed its 2018 targets for its
Switzerland-based operations, its international wealth-management
unit and other divisions.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
November 30, 2017 05:47 ET (10:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Credit Suisse (NYSE:CS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Credit Suisse (NYSE:CS)
Historical Stock Chart
From Apr 2023 to Apr 2024