Bittersweet farewell for Tidjane Thiam as Credit Suisse profits soar
Credit Suisse has reported its highest annual profits in almost a decade, just days after chief executive Tidjane Thiam was ousted in the wake of a lurid spying scandal that erupted last year.
The figures
Credit Suisse’s pre-tax profit rose 40 per cent to 4.7bn Swiss francs (£3.7bn) for 2019, the highest figure since 2010.
Net income attributable to shareholders exceeded expectations, rising 69 per cent to 3.4bn Swiss francs over the year, above analyst forecasts of 3.2bn Swiss francs.
For the final quarter of the year, the Swiss domestic giant posted net income of 852m Swiss francs, ahead of predictions of 838.5m Swiss francs.
Net revenues reached 22.4bn Swiss francs, up from 20.9bn Swiss francs in 2018.
Return on tangible equity hit nine per cent in 2019, a rise from five per cent in 2018 but below previous targets of 10 to 11 per cent.
For 2019, the group reached a cost/income ratio of 77.6 per cent, its best since 2010.
Credit Suisse shares were trading 0.56 per cent down in Zurich by mid-morning UK time.
Why it’s interesting
The results represent a bittersweet farewell for Thiam, who was ousted last week after a bitter boardroom battle with chairman Urs Rohner amid fallout from a scandal over the bank spying on former executives.
Thiam’s departure came despite powerful investors last week backing the chief executive and instead pressing for Rohner to quit instead.
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During his four years in charge, Thiam has tried to put the Swiss lender on a more even keel by cutting costs and exiting more risk intensive banking activities.
However, Switzerland’s second-biggest bank has been mired in scandal since the lender hired a spying firm last summer to tail Iqbal Khan, a star banker who was in charge of its wealth management division but then defected to arch-rival UBS.
Although Credit Suisse insisted that the use of private detectives to tail Khan was a one-off incident, it emerged in December that the bank had also spied on its former head of human resources.
When Thiam’s departure was announced, Rohner said that the emergence of the second case had “made the situation worse” and forced Credit Suisse’s board to take action.
Although an external investigation found that Thiam had not known about the surveillance, his long-time lieutenant Pierre-Olivier Bouee was ousted following the probe.
What Credit Suisse said
“I am proud of what Credit Suisse has achieved during my tenure,” said Thiam. “We have turned Credit Suisse around, and our 2019 results show we can be sustainably profitable.”
“Our performance in 2019, the first full year post restructuring, illustrates how much the bank has changed since 2015”.
Thiam said he would be an “enthusiastic supporter” of his colleagues as they “continue to build momentum in the business”, and thanked the bank’s clients, staff and investors.
“I welcome Thomas Gottstein in his new role. I have a lot of respect for his qualities as a business leader but also as a person I know he will take Credit Suisse to the next level.”
Gottstein thanked Thiam for his “support and partnership”, adding: “I look forward to devoting my full energy to this treasured bank, its clients and shareholders”.