(Bloomberg) -- Chief Executive Officer Tidjane Thiam, seeking to reassure investors about his ability to turn around Credit Suisse, pledged to continue efforts to cut costs and steer the bank away from risky activities.
"The first quarter of 2016 has seen a continuation of some of the negative pressures experienced" last year, Thiam told shareholders in Zurich on Friday. "January and February were simply two of the worst months ever in international markets. As a result, we decided to accelerate our strategy of right-sizing and de-risking our market activities."
Thiam, who joined Credit Suisse from British insurer Prudential in 2015, is seeking to restore investor confidence in Switzerland's second-largest lender, whose stock has declined about 32% this year. The CEO, 53, announced deeper cuts to the securities unit in March, just five months after setting out plans to shrink that business and focus on wealth management.
"We are building our platform for the future," he said. "That can seem like a tough task, and one that rarely wins many plaudits in the short term, but it is the only path that will lead to success in the long term."
The shares dropped 4% to 14.59 Swiss francs at 1:19 p.m. in Zurich. The 39-member Bloomberg Europe Banks and Financial Services Index fell 1.6%, bringing losses to 16%. Credit Suisse shares are the third-worst performers on the benchmark.
Making his first appearance at the annual general meeting, Thiam said that while the wealth management business "remained strong" in the first quarter, restructuring efforts will continue to affect the bank's performance this year.
'DISCIPLINED, FOCUSED'
"It is therefore more important than ever for us to remain disciplined and focused on Credit Suisse's priorities going forward," he said. "Our aim is to be capital generative and to deliver profitable growth through the economic cycle."
Credit Suisse reported a bigger-than-expected loss in the fourth quarter and the CEO said last month that writedowns on trading positions are threatening profit again in the first quarter. The bank is scheduled to release earnings on May 10.
The losses linked to illiquid trades may force the company to sell a larger stake in its Swiss bank than previously planned, hurting future earnings, Morgan Stanley analysts led by Huw Van Steenis said in a note to clients on Thursday. Thiam earmarked the business for a partial initial public offering by the end of 2017 as part of his overhaul announced last year.
Asked about personal consequences tied to almost $1 billion in losses on soured credit positions, Chairman Urs Rohner told shareholders that the bank's risk committee "works in a very professional manner and very hard."
"The fact that there can be losses in the credit business when the cycle changes, is part of the business," he said. Rohner stands for re-election at the AGM.
Shareholders will be asked to elect two new members to the board, Joaquin Ribeiro and Alexander Gut, son of former Chairman Rainer Gut.
