Credit Suisse Plans to Buy Back Up to $3 Billion of Stock

(Bloomberg) -- Credit Suisse Group AG Chief Executive Officer Tidjane Thiam is poised to announce a stock buyback of as much as 3 billion francs ($3 billion) and a dividend increase, aiming to boost shares that have tumbled during his tenure.

Switzerland’s second-largest lender plans stock repurchases during the next two years of between 2 billion francs and 3 billion francs as well as a limited increase to the cash payout, according to people with knowledge of the matter. The plan will probably be announced at the bank’s investor day on Wednesday, said the people who asked not to be identified because the plans haven’t been disclosed yet.

Thiam is seeking to reward investors who’ve stayed with the bank through a three-year restructuring that’s shifted resources to wealth management and emerging markets while paring back more volatile trading. While he’s making good on last year’s pledge to boost returns, he’s still likely to face questions from investors on growth plans, profitability targets and fixing the trading unit.

Credit Suisse will distribute more through buybacks than dividends to shareholders, one of the people said. Stock repurchases are also subject to market conditions and the bank expects to keep some flexibility in case it wants to invest more in growth opportunities, the person said.

Swiss newspaper SonntagsZeitung reported at the weekend that the bank would announce a buyback for more than 3 billion francs, without saying where it got the information.

Thiam said last month that he’s not planning further cuts in the trading unit, while pointing out that wealth management is making money for the business. The bank is targeting a cost base of between 16.5 billion francs and 17 billion francs next year. That’s down from about 17.9 billion francs in 2017.

The bank isn’t planning to unveil major changes to strategy or its structure at the investor day, according to two people familiar with the matter. The bank expects to give an update on 2018 performance and won’t reveal new divisional targets for 2019, the people said.

To contact the reporter on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel

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