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Tidjane Thiam exits Credit Suisse with profits at decade-long high
On the eve of handing over as the head of Credit Suisse, the Ivorian CEO presented record results, the culmination of a turnaround program at the Zurich-based bank that began five years ago.
“I am proud of what Credit Suisse has achieved during my term of office. We have put Credit Suisse back on the right track, and our results for 2019 show that we can be sustainably profitable,” said Tidjane Thiam at the presentation of the annual results of the Swiss bank, from which he has just been forced to step down as CEO.
For 2019, Credit Suisse will post pre-tax earnings of CHF 4.7bn (EUR 4.4bn) — up 40% from CHF 3.4bn (EUR 3.19bn) a year earlier — a performance that is the best in a decade.
It is because of these record profits that the 57-year-old financier made a point of presenting Credit Suisse’s 2019 results in person and in detail before handing over the reins and microphone to his successor, Thomas Gottstein. The presentation was in the form of a defence of the balance sheet of his five years at the helm of the country’s second-largest bank.
Performance on the Rise
Net profit attributable to shareholders increased by 69% to CHF 3.4bn (EUR 3.19bn) for the year, above analysts’ forecasts of CHF 3.2bn (EUR 3.01bn) . In the fourth quarter of 2019 alone, the Swiss bank posted net profit of CHF 852m (EUR 800.5bn). This result should be qualified, since in the same period in 2018 a mini stock market crash tarnished the balance sheets of the companies listed on the Zurich stock exchange.
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The bank’s turnover reached CHF 22.4bn (EUR 21.5bn), compared to CHF 20.9bn (EUR 19.6bn) in 2018. Tangible return on equity reached 9% in 2019, up 5% from 2018, while Credit Suisse is targeting 10% in 2020.
The Board of Directors proposes a dividend payment of CHF 0.2776 per share, compared to the remuneration of CHF 0.2625 for 2018.
Refocusing on Asset Management
After successfully leading the turnaround of the insurer Prudential from 2009 to 2014, Tidjane Thiam took up his post in July 2015 with the mission of restructuring the bank and redirecting activities towards wealth management at the expense of investment banking.
“Our goal was to become a bank that generates profitable, consistent and quality growth. From 2016 to 2019, we expanded our wealth management business and generated net new assets of CHF 121bn (EUR 113.7bn), and our pre-tax profit from wealth management grew double-digit (+15%) for four years in a row, from CHF 2.7bn (EUR 2.5bn) in 2015 to CHF 4.7bn (EUR 4.4bn) in 2019,” added Tidjane Thiam.
He concluded by saying, “Our restructuring was a success and our performance in 2019, the first year after this restructuring, illustrates how much the bank has changed since 2015.”
No announcement of political mandate
Forced to leave Credit Suisse a week earlier, following the spy scandal that splashed over the Zurich banking colossus in 2019, and closely affecting his then close collaborator, Pierre-Olivier Bouée, the CEO gave no indication as to his immediate future.
He told investors at the conference that he would now “rest and spend time with his family”.
Some were hoping for a statement on a possible future political mandate.