Credit Suisse Group AG will shrink parts of its investment bank and focus on growth in Asia and wealth management, Chief Executive Officer Tidjane Thiam said. The shares surged the most since he landed the job four months ago.
“We’re dealing with a really very well-performing investment bank, but where sometimes regulation has developed in an unsupportive or unfavorable way,” Thiam, who took over in July, told analysts on a conference call Thursday after the bank published earnings.
Elaborating at a news conference later in the day, he said that “part of the thinking in the investment bank is to shrink, to be able to focus on really the most value-creating businesses.”
Thiam, 52, formerly the 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.
The bank recorded a net income of 1.05 billion francs ($1.1 billion) in the second quarter. That was above analyst estimates and compares with a loss of 700 million francs a year earlier when bank was fined in the U.S. for helping Americans evade taxes.
Credit Suisse shares jumped as much as 7.8 percenton Thurday, the biggest intraday gain since Thiam’s appointment was announced in March. Shares were trading up 6.2 percent at 28.51 francs at 5:43 p.m. in Zurich.
The Swiss bank is already the third-biggest private bank in Asia after Citigroup Inc. and UBS, according to a ranking by Asian Private Banker. Credit Suisse says it has expanded lending to very rich people in the region by 2.8 billion francs since the start of the year.
The region’s potential is so great that the bank doesn’t have to overtake competitors, it just has to keep growing, said Alevizos Alevizakos, a London-based analyst at Keefe Bruyette & Woods.