Swiss bank Credit Suisse may fail to reach the ambitious targets it set itself for this year, according to the analysts of a major U.S. bank. Shareholders however have still plenty of reason to keep hold of the stock.

Tidjane Thiam, the chief executive officer of Zurich-based Credit Suisse on December 11 will host the bank’s annual investors’ day in London. He will outline his bank’s performance over the past quarters, the general situation of the bank and give an outlook over the coming year.

The news may not all be positive, because the year 2019 hasn’t been an easy ride for Thiam, according to U.S. news organization «Bloomberg». Analysts at Citigroup cited by «Bloomberg» said the Swiss giant had missed its key profitability goal – the return on tangible equity.

Trading Unit on the Up

A year ago, Thiam said he expected to improve profit in 2019 through a number of measures. Return on tangible equity was supposed to increase to a level of 10 to 11 percent. The Citigroup analysts believe that Credit Suisse will have a rate for the measure of about 8.4 percent in 2019 and that the bank will lower its targets for 2020 at the investors’ day.

The trading unit of the Swiss bank made great strides in 2019, according to the report, but other divisions suffered from low-interest rates and weak transaction volumes in Asia-Pacific and investment banking. These units will have lower pretax profits, the analysts said.

Keep Hold of Shares

If Citigroup analysts are right in the predictions, the return on tangible equity will have declined yet again. In the second quarter, the rate was 9.7 percent, before declining to 9.0 percent in the third. Which, to be sure, had still been the double of what the bank had achieved in the same period of 2018.

Citigroup kept its buy recommendation on Credit Suisse shares despite the disappointing outlook, because the stock is still cheap relative to the bank’s tangible book value. The bank will also likely reaffirm its plan to buy back as much as 1 billion Swiss francs ($1 billion) worth of shares.