Credit Suisse trims targets but says revamp is working

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Zurich-based Credit Suisse said on December 7 that “given the challenging market conditions that we are facing,” the bank is lowering the targets set for its investment banking and asset management businesses.

However, goals set for its wealth management units remain unchanged, it said.

Credit Suisse is in the midst of an overhaul planned by chief executive Tidjane Thiam, who took office in July 2015. His restructuring, which has involved focusing on markets in Switzerland and Asia while emphasising wealth management at the expense of investment banking, has been hindered by swooning markets and a loss of confidence among many investors.

Shares of Credit Suisse have fallen about 40% since Thiam outlined his plans for a turnaround in October 2015.

Targets set at that time by Thiam for 2018 included increasing pretax profit at the international wealth management unit to 2.1 billion Swiss francs ($ 2.1 billion). The target for the unit, which includes asset management, has been lowered to Sfr1.8 billion, Credit Suisse said.

While targets for the wealth management business in Asia remain unchanged, Credit Suisse said worse-than-expected investment banking results in the region mean that instead of more than doubling pre-tax profit in Asia to Sfr2.1 billion by 2018 – as compared with 2014 – the bank now expects to reach Sfr1.6 billion in pre-tax profit.

The target for increasing pretax profit at Credit Suisse’s Switzerland-based operation to Sfr2.3 billion by 2018 – from Sfr1.6 billion in 2014 – remains unchanged.

Credit Suisse also said that it has ramped up efforts to cut costs and now expects the cost of running the bank to be less than Sfr17 billion by 2018, compared with a previous target of less than Sfr18 billion.

Write to John Letzing at john.letzing@wsj.com

This article was published by The Wall Street Journal

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