Implementing strategy changes at a faster pace, introducing a new system for handing out money to different business units and defining the best countries to do business in: these are the key challenges for new Credit Suisse chief executive Tidjane Thiam.
Having replaced Brady Dougan at the start of the month, Thiam has been busy meeting staff, getting to know the ins and outs of the bank, addressing key investors – and in the past few days, giving media interviews.
Thiam has not given away any details of what changes he is planning for Credit Suisse. Instead, he has spoken of the direction he would like to take the bank.
Many investors are hungry for news of what Thiam plans to do with Credit Suisse’s investment banking business. Some analysts think it is over-bloated and using up too much of the bank’s capital without presenting adequate returns.
But Thiam would not be drawn on such specifics, telling journalists that such decisions would be announced some months down the line. What he does say, is that all business units – investment banking, asset management, retail and wealth management – will have to compete for central funds and prove a business case for why he should meet their financing demands.
On this front, he would be “ruthlessly selective” in choosing which business lines will benefit the most, he told the Financial Times.
But while acknowledging the demands of increasing – and changing – regulations, Thiam said the bank’s capital would be allocated firstly on the basis of which market would produce the best returns.
The strategy will be first “find the right business, then from that will flow whether we are adequately capitalised or not”, he told the Financial Times.
While praising predecessor Brady Dougan, Thiam hinted that changes had not happened rapidly enough for some investors.
“Our investors have become impatient with the pace at which we have moved,” he told the Neue Zürcher Zeitung (NZZ). “They expect rapid change, and maybe we need to move somewhat faster. I cannot say what we will change. Once we know that, however, we must implement our projects very quickly and in a disciplined manner.”
At British insurer Prudential, Thiam expanded the company’s business in Asia, forging close links with important players in the region. But speaking to the NZZ, he said his track record in Asia had been “over exaggerated”.
“We will set a strong focus on Asia, without neglecting other markets. Switzerland will continue to form the core of Credit Suisse. The country is economically strong and the bank has its roots here,” he said.
“This is important, because only those companies which have a strong position at home gain high credibility in foreign markets.”
Thiam also drove home the importance of Credit Suisse’s business in the United States, despite encountering tax evasion problems there that resulted in a $2.6 billion (CHF2.4 billion) fine last year.
“[We are] a major player in the largest economy in the world; some people consider it a problem, I don’t,” he told the Financial Times. Having a global business without a presence in the US would be akin to “fighting with one arm behind your back”.
Thiam told Swiss public television RTS that he would look to the long-term when developing his strategy.
“I truly believe it’s necessary to develop strategies that work all the time – not only when things are going well,” he said.
“In life, very few things are beneficial in the short term as well as in the long term. Very few. Most things which are truly beneficial in the long term have a short-term cost. And that often means a certain short-term unpopularity. But it’s the long term that counts.”