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The COVID-19 pandemic will challenge Credit Suisse Group AG's return on tangible equity in 2020 despite a good first-quarter result, but a level of 10% is achievable "at least over the medium term", CEO Thomas Gottstein said.
Previously, the bank guided for a 2020 ROTE of 10%, which could increase to 11% "in a constructive market environment," and targeted a ROTE "above 12%" over the medium term.
"It is our goal to be at or above 10% because that's where we think in a normalized world cost of equity of our business is." He also pointed to the good ROTE track record over the past fourth quarters, Gottstein told analysts at a first-quarter earnings presentation on April 23.
ROTE in 2020
Boosted by a positive one-off tax rate effect, first-quarter ROTE was 13.1%, up from 7.8% a year ago. Excluding the one-off, the result was in the range of 9.0% to 9.5%, and therefore closer to the levels recorded in the three preceding quarters. Credit Suisse booked 8.6%, 9.0%, and 9.7%...