There is no way to clean up the past without generating losses, Credit Suisse Chief Executive Officer Tidjane Thiam told CNBC on Monday — but profitability’s on the way.
“We’ve been cleaning up a lot of undesirable trades that we should not have done” in the past, he said. Credit Suisse embarked on a three-year plan — slated to end this year — to reorganize operations around its wealth management and emerging markets businesses.
In February, the bank has reported its third consecutive annual loss.
“We’ve finished winding down that restructuring end of this year … after that the company will be very profitable,” Thiam said.
“There’s no way to clean up the past, given the legacy we have, without generating losses. Not to be confused — we have profitable operations of the company. Cleaning up the past generates losses. (But) the company is operating very profitable.”
Credit Suisse’s third consecutive annual loss
The bank posted a net loss of 983 million Swiss francs ($1.03 billion) for 2017, attributing it mostly to the re-assessment of deferred taxes resulting from changes to the U.S. code.
That was improved from 2016, when it reported a net loss of 2.438 billion Swiss francs. It was hit with a $5.28 billion fine from the U.S. Department of Justice in the fourth quarter related to the sale of mortgage assets leading up to the 2008 global financial crisis.
Out of the last three full-year periods, Credit Suisse’s losses were most severe in 2015, when it had a 2.944 billion Swiss franc loss. For that year, it booked a large impairment charge at its investment banking business.
In February of this year, Thiam told CNBC that his bank “is in a better place” than it was a year ago. The chief executive described 2017 as a “crucial year” of delivery in its three-year restructuring plan.