FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at its headquarters at the Paradeplatz square in Zurich, Switzerland October 1, 2019. REUTERS/Arnd Wiegmann/File Photo
ZURICH (Reuters) – Credit Suisse posted a 69% rise in annual net profit on Thursday in a bittersweet swan song for outgoing Chief Executive Tidjane Thiam.
Thiam quit after a spying scandal at the bank sparked a boardroom revolt and will leave formally on Friday. He will be replaced by company veteran Thomas Gottstein.
Gottstein said the group remained committed to its strategy and previously announced targets.
Net income rose to 3.419 billion Swiss francs ($3.50 billion) for the year. Analysts had on average expected Credit Suisse to generate 3.5 billion francs, according to a consensus of 13 analysts compiled by the bank.
Thiam spent much of his four and a half years at Credit Suisse trying to put the lender on a more stable footing — slashing costs and exiting riskier and more capital-intensive investment banking activities.
But his legacy will be defined by the spying controversy which saw Credit Suisse, one of the most high-profile names in European banking, admit to snooping on two former executives. The bank blamed the espionage on a rogue operation run by one of Thiam’s closest lieutenants. Credit Suisse and Thiam have said the CEO knew nothing of the activities.
Even with the restructuring undertaken by Thiam, Credit Suisse is facing a tough operating environment with more competitors now focusing on wealth management, ultra-low interest rates and the threat from passive investing.
The bank lowered its 2019 and 2020 profitability targets in December, blaming a drop in dealmaking, negative interest rates and global trade tensions for the climbdown.
At 9%, the bank’s return on tangible equity (RoTE) for 2019 matched the lowered expectation of above 8% it flagged in December. It had previously targeted 10-11%.
Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields