Simplifying Credit Suisse: Wealth Management Growth and Reshape of IB in New Strategic Plan
Credit Suisse Group AG (CSG) presented a new strategic plan for 2022-2024. This is the first strategic review since Antonio Horta-Osorio became the Group's Chairman in April 2021.For the next three years, CSG’s key strategic initiatives will be based on strengthening businesses, simplifying the organisational structure and investing for growth, particularly in Wealth Management where the Group sees significant growth opportunities. The Group also announced the exit of most Investment Banking prime services, whilst reshaping other IB related businesses where the Group has a competitive advantage.
The Group aims to improve the return on tangible equity to above 10% by 2024, which we view as optimistic but achievable if the strategic initiatives work. The CET1 capital and CET1 leverage ratios, however, will remain similar to current levels by end-2024, at above 14% and 4.5%, respectively.
“We consider that the announced strategic initiatives are needed to restore investor confidence in Credit Suisse’s franchise and improve risk profile and management of the Group. The Group has announced a reorganization based on simplification which in our view makes sense and is similar to the structure at other universal banks. WE also consider the ROTE target of above 10% by 2024 as optimistic considering that in Q3 2021, which was a good quarter, the Group reported a 4.5% ROTE.,” said Maria Rivas, Senior Vice President, Global Financial institutions at DBRS Morningstar.
Credit Suisse is a financial services provider based in Switzerland. Co. is active as an integrated bank. Co. operates through two global divisions, Private Banking and Corporate & Institutional Banking. Co. offers comprehensive advice and a broad range of financial solutions to private, corporate and institutional clients primarily domiciled in Switzerland. Co. maintains operations in three regionally focused divisions: Swiss Universal Bank, Asia Pacific and International Wealth Management serving Western Europe, Central and Eastern Europe, Latin America and Africa.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
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