(Bloomberg) — Credit Suisse Group AG will shrink parts of its investment bank and focus on growth in Asia and wealth management, said its new chief executive officer. The shares surged the most in four months.
“We’re dealing with a really very well performing investment bank, but where sometimes regulation has developed in an unsupportive or unfavorable way and the pragmatic thing to do is take that into account,” Tidjane Thiam, who started as CEO this month, told analysts on a conference call Thursday. That will mean shrinking some of the division’s activities, he said, without identifying them.
Thiam, 52, formerly CEO of insurer Prudential Plc, said Switzerland’s second-biggest bank will allocate more capital to wealth management and seek to grow in Asia and developed markets such as its home country. Scaling back the investment bank in favor of managing money for rich clients would mirror the approach of UBS Group AG, the bank’s larger Swiss rival.
Credit Suisse shares jumped as much as 7.8 percent, the biggest intraday gain since Thiam’s appointment was announced in March, and were trading up 7.6 percent at 28.89 Swiss francs as of 12:39 p.m. in Zurich.
As global regulators order lenders to hold more capital to absorb potential losses, the fixed-income trading departments of their investment banks have been among the most affected. Revenue from debt trading fell 13 percent to 1.24 billion francs ($1.3 billion) at Credit Suisse in the second quarter from a year before, the company said Thursday.
The private banking and wealth management unit posted a pretax profit of 1 billion francs in the period, beating analysts’ estimates, after a loss a year earlier when it was fined for helping Americans evade taxes.