P&L

Credit Suisse’s new boss is off to the best possible start

Obsession
Future of Finance
Obsession
Future of Finance

The numbers: Strong. The Swiss banking group comfortably beat expectations, recording a net profit of 1.1 billion Swiss francs ($1.2 billion) in the second quarter. That was the second-consecutive billion-franc quarter and represents a big swing from a loss in the same quarter last year, when the bank was hit by a big legal fine for helping American clients evade taxes.

The takeaway: New chief executive Tidjane Thiam (pictured above) couldn’t have asked for a better start to his tenure. Having joined three weeks ago, he can’t take credit for the latest results, but the details of the bank’s recent performance fit the direction that he’s expected to steer it. Namely, that the wealth-management unit performed better than expected, while the investment banking operations lagged somewhat.

What’s interesting: Thiam says that he will announce the results of a strategic review later this year. The guiding factor will be to focus on business lines that should “be capital light, be cash generative and produce less volatile resource than today,” he said. The former insurance-industry executive also noted that Asia is the most exciting growth market for the bank, and the bank is expected to expand via acquisitions in the region. Like at its Swiss rival UBS, all signs point to Credit Suisse shrinking its volatile investment bank to focus more on the staid, steady business of wealth management. That has certainly paid off for UBS, and the big jump in Credit Suisse’s shares suggest that the market thinks it’s a good move for it too.

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