Credit Suisse Lowering Profit Target for Asset Management

   By John Letzing 
 

ZURICH--Credit Suisse Group AG (CS) said market conditions have forced it to dial back the expectations that the Swiss bank set as part of a restructuring unveiled last year.

Zurich-based Credit Suisse said Wednesday 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 emphasizing 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 Mr. Thiam outlined his plans for a turnaround in October 2015.

Targets set at that time by Mr. Thiam for 2018 included increasing pretax profit at the international wealth management unit to 2.1 billion Swiss francs ($2.1 billion). That target for the unit, which includes asset management, has now been lowered to 1.8 billion francs, Credit Suisse said Wednesday.

While targets for the wealth management business in Asia remain unchanged, Credit Suisse said a worse-than-anticipated investment banking result in the region means that instead of more than doubling pretax profit in Asia to 2.1 billion francs by 2018--compared with 2014--the bank now expects to reach 1.6 billion francs in pretax profit.

The target for increasing pretax profit at Credit Suisse's Switzerland-based operation to 2.3 billion francs by 2018--from 1.6 billion francs in 2014--remains unchanged.

Credit Suisse also said Wednesday that it has ramped up efforts to cut costs and now expects the cost of running the bank to be less than 17 billion francs by 2018, compared with a previous target of less than 18 billion francs.

Write to John Letzing at [e-mail]

(END) Dow Jones Newswires

December 07, 2016 01:22 ET (06:22 GMT)

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