Times are tough for European banks as they struggle to achieve profitability and allay stagnating revenues, however at least one individual sees scope for recovery in 2017, with Credit Suisse CEO Tidjane Thiam championing the group’s reorganization attempts.
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Since taking over as the Chief Executive Officer in 2015, Thiam has helped oversee some trying times for Credit Suisse, though he has stuck to a reorganization plan that is predicated on job cuts and internal transformation. Moreover, his optimism is reinforced by improvements in market conditions, which could yield better revenues by years end.
As recently as last month, Credit Suisse announced an additional round of cuts in Switzerland, as well as plans to restructure its business in order to return to profitability after losing close to $3 billion. The bank revealed that it would be seeking to increase its cost cutting efforts by around $820 million.
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Thiam’s reorganization is also predicated on a consolidation process of its Global Markets division, including a consolidation of the FX Cash and FX Options businesses into the STS operations of Credit Suisse, which are part of the Swiss Universal Bank.
Road to Recovery
As opposed to other lenders such as Deutsche Bank or Standard Chartered, which have relied on more extensive job cuts or relocation efforts, Credit Suisse has opted for a more internalized scheme. Time will tell whether or not the efforts deployed by Credit Suisse are more effective, though Thiam appears to be all in on the strategy.
According to Mr. Thiam in a recent interview with Bloomberg TV: “Certainty we see a strength in fixed income, you can see that. You can see the securitized products market going. You can see generally global credit products growing. You can see leveraged finance still at a reasonable level of activity.”
Should Credit Suisse ultimately mount a strong comeback across its H1 earnings, it is likely that other banks may follow suit with internalized strategies – to date, the European banking sector has been one of the most pressured heading into 2017.