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.