The new chief executive of Switzerland’s Credit Suisse bank, Tidjane Thiam, seemed irritated on Wednesday when a Swiss journalist asked him how he planned to grow the bank given that his plans seemed confined to cutbacks and divestments.
“It is not part of my job description – as agreed with the chairman – to have big plans,” said Mr. Thiam, who took over as chief executive in July. “This plan is a plan to succeed, it’s not a plan to be big.”
But Mr. Thiam’s ambition and the radical restructuring he announced on Wednesday failed to convince the media or the stock market. Credit Suisse’s share price slumped because the revamp details were compounded by disastrous third-quarter results with a bigger-than-expected drop in net profit of 24 percent, to 779 million Swiss francs, or $814.4 million. Analysts polled by Reuters had expected 921 million francs.
Mr. Thiam, like his rival John Cryan, the new head of Germany’s Deutsche Bank, faces a three-pronged challenge. The balance sheet of the investment banking operation is too bloated, the costs are too high and growth is too weak. Mr. Thiam has the additional problem that he needs to beef up his capital base as the common equity tier 1 capital ratio, a measure of a bank’s financial strength, is too low at 10.2 percent.