Credit Suisse CEO: ‘Aggressive’ Cost Cutting Will Help Us in 2013
Credit Suisse will continue to cut costs aggressively as it seeks to keep profits stable in the wake of poor fourth-quarter earnings and a fragile macro-economic environment, CEO Brady Dougan told CNBC Thursday.
"We've set aggressive cost cutting targets and past cost cutting is a big benefit to us coming into 2013. But we think there are additional ways in which we can continue to do that and the environment will continue to present challenge," Dougan said.
The Zurich-based bank said it will slash spending by 4.4 billion swiss francs ($4.83 billion) by the end of 2015, an increase of 400 million after earlier posting a lower-than-expected fourth quarter net profit of 397 million francs ($537.2 million), missing analyst forecasts.
Dougan insisted despite the prevailing economic headwinds the bank had put in a good performance but the bank's shares opened flat at the start of trading Thursday.
"It was a good performance in a challenging quarter and towards the end of the fourth quarter we tend to see a slowdown in client activity and we saw that again this period," Dougan said.
"This year has started off like most years with good activity but we don't want to make too much of that, as it's only five weeks into the year. We have completely transformed our business in the course of 2012. Our cost base is lower, our risk is lower. We've built up our capital so we feel whatever comes this year we're going to take better advantage of it," Dougan added.
He said that while the tentative recovery was good it remained fragile and macro-economic concerns could rear up to destabilize market confidence.
The Swiss bank was publicly hauled up by the Swiss National Bank, which asked it to urgently raise capital in June 2012.
On Thursday, Dougan said the bank had met its target of a pro-forma capital requirement of 9.4 percent and would meet the 10 percent required by Swiss regulators by the middle of the year.
"Once we do that we're going to be able to return significant cash to our shareholders," he said.
According to Dougan the bank has been ahead of the rest of the financial industry in cutting costs and raising capital.
"We were actually doing it in advance of what other participants in the market are doing now. We have transformed our business," he said.