Banks Are Like `Canary in Coal Mine' Amid Selloff, Thiam Saysby
Banks are more sensitive than other industries to fundamental economic change, Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said when questioned about the selloff in their stocks.
“We are the canary in the coal mine,” Thiam said Wednesday at a conference hosted by the Swiss bank in Florida. “Banks are hit harder when the cycle turns and right now we are being hit hard.”
Thiam said he is using the challenging environment to “accelerate the transformation” of the bank. Credit Suisse is shrinking its investment banking arm and expanding the business of managing money for the wealthy under a strategy defined by the new CEO.
He sees lower trading volume this year in the Asia-Pacific region, where the prospects for growth have dimmed. Credit Suisse recorded more revenue from trading in that part of the world in last three months of 2015 compared with a year earlier.
Banks have suffered more than other industries in this year’s rout in global equities, with the Bloomberg Europe Banks and Financial Services Index declining 24 percent. Credit Suisse, which reported bigger-than-expected restructuring charges and trading losses during the fourth quarter, has lost 38 percent of its value.