Thomas Gottstein increases the pace compared to the Thiam era

On Investor Day today, CEO Thomas Gottstein is setting a faster pace for Credit Suisse. Shareholders receive special consideration.

Asset Management Focus, Investment Bank Acceleration – By Design, Credit Suisse (CS) Remains In The Strategic Waters Of The Former Boss Era Tidjane Thiam, that tied the investment bank in favor of asset management. His successor in office since last February Thomas gottstein it is now picking up the pace, as the big bank reported Tuesday on Investor Day. Starting in 2021, according to the CEO, the bank will begin its “growth phase”.

More profitability of asset management

In all companies offering asset management, pre-tax profit is expected to increase to a total of 5 to 5.5 billion francs by 2023. As a medium-term goal, the big bank expects a return on regulatory capital. 20 to 25 percent and more than 40 percent in asset management. At the investment bank, on the other hand, they aim for a return on regulatory capital of between 10 and 15 percent.

Overall, in the medium term, this should result in a return on tangible capital (RoTE) of 10 to 12 percent, which is on top of the plan specified last summer. The Common Equity Tier 1 (CET1) ratio should be at least 12.5% ​​in the first half of 2021.

Share buybacks are back

In any case, CS shareholders should be given special consideration. More reserves are planned for dividend growth of at least 5 percent per year, including an increase in the dividend planned for 2020 compared to the distribution of 0.2776 francs per share this year.

As promised, the bank is also resuming the share buyback. In January 2021, shares of up to 1.5 billion and at least 1 billion will be repurchased for the year as a whole, assuming appropriate market and economic conditions, as stated.

Save and spend money

Gottstein also wants to achieve the feat of investing and saving at the same time. CS expects adjusted business expenses of up to CHF 16.5 billion by 2021. The restructuring measures announced last July should allow the financing of additional investments of up to CHF 600 million, especially in asset management and in China ESO.

The big bank wants to continue its sustainability course. A Sustainability Advisory Committee at the board level will monitor this going forward, as convened on Tuesday. Additionally, CS is committed to developing science-based climate targets within the next 24 months and intends to align its business activities and financing in a climate neutral manner for decades to come.

Copyist of charge and legal case

Finally, more in the here and now is the information from previous businesses in the last quarter of the year: In asset management, transaction volumes have increased compared to the previous year, according to CS, especially in Asia. On the other hand, there was the unfavorable influence of the strong franc and the pressure on interest income. The Investment Bank is doing well, with earnings higher than Q4 2019.The bank had already warned that a cancellation in the area of ​​hedge funds and for a legal case in the US would have an impact negative on the bill in the fourth quarter.

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