Dougan Lowers Returns Goal as Blankfein Clings to 20%
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By cutting Credit Suisse Group AG’s profitability target last week, Brady Dougan acknowledged what some Wall Street bankers and investors are loath to concede: Tougher capital rules will mean lower returns.
Dougan, the Zurich-based bank’s chief executive officer, lowered the goal for return on equity, a measure of profitability, to more than 15 percent from more than 18 percent. Barclays Plc said today it will aim for a 13 percent ROE, down from an average of 18 percent over the past 30 years. By contrast, Goldman Sachs Group Inc., the bank that makes the most revenue from trading, insists its target of a 20 percent return on tangible equity doesn’t need to be moved.