Credit Suisse CEO plans new era ending cost-cutting phase

Credit Suisse signalled the era of cost-cutting and job cuts may be soon be over, telling employees that the bank will emphasise businesses that generate higher returns in its next strategic plan.

Credit Suisse aims to achieve its current capital, cost and pre-tax income targets by 2018 but Chief Executive Tidjane Thiam told staff preparation will start in July on its 2018-2020 plan.

Thiam, who took over as CEO just over two years ago, sent the memo to staff on Friday and seen by Reuters on Monday, after a two-day annual strategy break at the end of June attended by the board of directors and executive board.
"Looking beyond 2018, we agreed there would continue to be significant value creation opportunities available to a restructured Credit Suisse, and that would translate into a growing valuation of Credit Suisse as we continue to allocate more capital towards businesses that will generate higher returns and are more capital efficient," Thiam wrote.

Two share sales have raised more than 10 billion francs ($14.24 billion) combined while job cuts and other belt-tightening measures have trimmed 1.9 billion francs in fixed costs. Mr Thiam said the board was satisfied with the bank's performance over the last 18 months.

"With the progress achieved to date, we believe we are on track to deliver on our strategic ambitions," the CEO underlined in the memo.

For the first quarter of 2017 Credit Suisse reported net profit of 596 million francs, its highest quarterly profit since the restructuring. Zurich-based Credit Suisse, Switzerland's second-biggest bank after UBS, reports second-quarter results on July 28.