After years of disappointing growth and stagnant inflation, 2017 will be the year that the European economy finally starts to motor on, beating the expectations of almost everybody, according to a research team from Credit Suisse.

"The euro area is set to deliver an upside growth surprise this year. Market expectations for growth are too low, in our view. Growth should strengthen on the back of stronger global trade and a pick-up in construction activity. It should remain supported by consumer spending, for which the fundamentals are improving," Credit Suisse's Anais Boussie and her team write in their European Economics note on Monday.

"Such a solid expansion should mean Europe’s financial fundamentals will also improve. Deleveraging is steady and well advanced. Bank asset quality is improving – NPL ratios should fall further in the coming year or so," the note continues.

Signs from the single currency area have been largely positive in recent months. GDP growth has strengthened, inflation is back above 1% after spending a significant period at or below zero, and on Monday unemployment remained at its lowest level — 9.8%— since the tail end of the financial crisis.

These positive signs will continue to manifest themselves throughout the year, Credit Suisse argues. The bank then identifies 10 themes that it feels will characterise the eurozone economy in 2017, spanning everything from inflation continuing to rise, all the way to political risks from events like the French and Dutch elections being "contained."

You can see the bank's key European themes below:

1. "A year of beating expectations"— As mentioned previously, Credit Suisse thinks the market consensus on eurozone growth in 2017 is too pessimistic. "We think that view is wrong, and markets are likely to be surprised by the resilience and vigour of euro area growth this year. We now expect GDP to rise by a sturdy 2.0%."
2. Consumer spending will continue to underpin the recovery— Instead of being fuelled by things like low oil prices, consumer spending will grow thanks to improving fundamentals like labour demand. "Labour demand is surging. Employment rose 1.3% last year, after a 1.0% rise in 2015. At the margin, that delivered a boost to labour income growth despite subdued wages. And there’s more strength to come."
3. "Momentum is building" in the construction sector— "Construction investment has contributed positively to growth for the past six quarters, and appears to be accelerating," Boussie and her team write.
4. Exports will be supported by favourable global conditions— While fears abound about what Donald Trump's presidency could mean for global trade, Credit Suisse is positive, saying "it’s likely that global trade growth will improve after a couple of years of weakness. The global cycle looks to be at a modest inflection point. After a couple of years of slowdown, activity is accelerating, and the euro area should be a beneficiary."
5. Financial fundamentals will "continue to improve"— "Solid, resilient growth has consequences. It has created an environment in which many structural financial indicators have improved considerably, and will continue to do so. These favourable dynamics are apparent and important, but frequently overlooked by investors and commentators."
6. Inflation will continue to rise, with core inflation coming into focus— Headline inflation will surge off the back of rising oil prices, but core inflation will struggle to keep pace, Credit Suisse's team writes. "The risk of deflation in the euro area has largely disappeared and headline inflation is set to rise sharply in the first half of 2017 as the strong dampening effect from past oil price declines fades away. In contrast, we expect core inflation, which excludes volatile energy and food prices, to pick up only gradually – and at a slower pace than the ECB projects."
7. The ECB will be "dull"— After announcing in December that it will continue its QE programme until at least the end of the year, the ECB is likely to avoid any fireworks in 2017, likely leaving its base interest rate unchanged and QE the same. "We expect little from the ECB this year," Credit Suisse says.
8. Fiscal stimulus will make an appearance, but it will be limited in scope— "Current assumptions suggest a positive contribution of fiscal policy to activity in 2017-18, although smaller than in 2016, when a significant boost came from refugee related expenses in Germany."
9. The political risk of the French election will be "contained"— Credit Suisse does not believe that the far-right Front National's candidate Marine Le Pen has much chance of winning the presidency, limiting the chance for a further shock to the eurozone. Even if Le Pen were to win, the bank writes, "she would still have limited powers."
10. Political risks in the rest of the continent will fail to cause any major shock— With the likes of Le Pen in France, Geert Wilders in the Netherlands, and the Five Star Movement in Italy, risks to the political establishment are significant, but Credit Suisse sees little risk of any major upset from these actors. "We are not complacent and see political risks still building up – but as a tail risk for now. Overall, we don’t think forthcoming elections will deliver substantial political, financial, or economic shocks this year."

Join the conversation about this story »

NOW WATCH: This is the Excel trick that will change everything about how you work with data

Credit Suisse formally agreed to pay $5.3 billion to settle with U.S. authorities over claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the U.S. Department of Justice said said on Wednesday.

Join the conversation about this story »

NOW WATCH: Women are more attracted to men with these physical traits

When Snapchat parent company Snap Inc. goes public next month, its sale will prove a windfall for a handful of executives who helped grow the company from a tiny startup to a $25 billion juggernaut in five years.

That includes one unlikely addition: chief strategy officer Imran Khan.

Khan, only at Snap for about two years, has been granted $145 million worth of shares, the company said in a filing on February 2. Those shares will likely be worth a lot more at the IPO price. And he was paid a $5 million bonus last year.

Not bad for a guy who, not long ago, was working for "some bucket research shop." That's how one Wall Streeter described Khan's early career. (He did indeed work at a small company, called Fulcrum Global Partners, until about 2004; it shut its doors in 2006.)

Khan, 39, joined Snap in early 2015, in part to help chart the company's path to an initial public offering, though his official role has been to build up revenue, expand the business, and run ad sales.

He was hired from Credit Suisse, where he was head of global internet investment banking and was perhaps best known for his leading role on the initial public offering of the Chinese e-commerce giant Alibaba Group in 2014, the largest share sale ever.

When news of his move to Snap broke it made headlines, but Khan is not the only Wall Streeter to wind up playing the "grown-up" in a technology startup. Anthony Noto, once the head of technology banking at Goldman Sachs, was already Twitter's finance chief. Ruth Porat would make the move from Morgan Stanley to Alphabet, Google's parent.

For Khan, this wasn't the first major pivot in his then 15-year career.

'A very strategic thinker'

Business Insider spoke with six executives who worked directly with Khan at various points in his career. They all asked not to be identified for this story. Through a spokesman, Khan declined to comment for this story.

Khan's career has taken him from an investment-banking job at ING Barings, the Dutch financial-services firm, to conducting sell-side research at JPMorgan and eventually running the technology banking franchise at Credit Suisse.

His former colleagues describe him as ambitious and strategic in his career choices. Though most spoke in friendly terms, it's clear that his rise and transition from research analyst to internet banker and now tech-industry millionaire rubbed some the wrong way. One person, for example, felt that Khan failed to credit others for helping him make the switch from research to banking, saying Khan "clawed his way up." But that kind of talk was dismissed by other colleagues as plain old jealousy among bankers who once would've been peers but perhaps have found themselves courting Khan for a role on Snap's IPO, likely to be the biggest tech flotation since Alibaba's sale in September 2014.


Born and raised in Bangladesh, Khan came to the US as a student, to Colorado, where he graduated from the University of Denver's Daniels College of Business in 2000.

After a stint at a tiny Denver-based satellite-broadband startup called WildBlue, he wound up at ING Barings in New York in 2000, according to his profile on BrokerCheck. After the banking business was sold to ABN Amro in 2001, he wound up at Fulcrum (the "bucket research shop"). There, he began to conduct "sell-side" research on technology companies such as Yahoo, Amazon, and eBay.

Khan moved to JPMorgan in 2004 where he eventually became head of global internet and US entertainment equity research. He's been described as steeped in the tech industry, close to executives, and is married to an executive at an Amazon-owned e-commerce company.

At JPMorgan, Khan became one of the top-ranked internet analysts on the Street, landing the coveted top or second spot in Institutional Investor's annual rankings of researchers. He was also one of the youngest managing directors at JPMorgan, having attained the title at 29. 

Khan's meteoric rise and the accolades were carefully cultivated, one person said.

"He's a very strategic thinker," the person said. "He's the type of guy who ranked at JPMorgan as a research analyst not because he's the smartest guy or the best stock picker ... but he's a very affable, likable guy. He knew how to work the system."

This person said that Khan would build up relationships with company CEOs so that he could get the first question on quarterly-earnings calls. "He's always thinking about that stuff."

'A testament to his scrappiness'

That strategic thinking soon had Khan building relationships with China's budding technology companies, which were flocking to the US IPO market in the mid-2000s. The payoff on those came with his first big switch. 

He felt like a banker in a research analyst's clothing.

In 2011, after six years with JPMorgan, Khan moved to Credit Suisse to take over the company's internet-banking franchise. It was Alibaba cofounder Joe Tsai who referred Khan to Credit Suisse and encouraged him to transition from an analyst to a banker, three people said. 

Still, it was a risk for Credit Suisse to pull a research analyst over to run a critical investment-banking division. Khan was placed under the wing of Bill Brady, then chairman of the bank's global technology investment-banking group, two people said. Brady now does that job at Jefferies.

"A bevvy of people who made that transition were total failures," one person said. "Imran was more commercial; he felt like a banker in a research analyst's clothing."

With Khan on board, and Chinese companies coming back to the US markets, Credit Suisse's tech-banking team started to land key deals. As the firm's head internet banker, Khan worked on the IPOs of Groupon, GoDaddy, Box, and the Chinese companies Weibo and Toudu. Most notable, of course, was Alibaba's $25 billion flotation.

"Imran is very good in front of people," one person said. "He's charming, he's very smart, he can connect with people right away."

Another person credited his success with a "work ethic and energy level" that was "off the charts" and an entrepreneurial spirit that stood out.

Credit Suisse's leadership role on the Alibaba deal makes up a big part of Khan's professional legacy. When he moved to Snap, The Wall Street Journal called him a "star tech banker." But three people told Business Insider that they felt he received more credit for that role than he was due, emphasizing that it was a team effort.

Credit Suisse's relationship with Alibaba predates Khan's arrival, they point out, and laid mostly with Vikram Malhotra, the then head of investment banking for Asia Pacific, and Boon Sims, who was global head of mergers and acquisitions.

But even those who credit Malhotra for winning Credit Suisse, the business said there is no bad blood between the two men. The two bankers worked hand in hand on the deal, speaking every day, and they are still close, one person said.

Imran stood out because he is the type of person who likes the spotlight, while Malhotra does not, another said.

Khan's ability to put himself in position to run the deal was "a testament to his scrappiness and finding opportunities and seizing opportunities," another person said.

Targeted moves

Still, Khan's perceived opportunism has "probably rubbed some people the wrong way," one former colleague said.

"I think he's a good guy — a great guy," this person added. "I think he made a lot of moves that were very targeted and focused."

Once Imran has decided he wants to get somewhere, he is very good at figuring out what he needs to do to get there, this person said.

"If he can position himself and get recognized as the man behind Alibaba, which he did by getting into the paper and onto TV — at that point he knew that was the best time to make a move and do something."

"With Imran, there is no gap between the concept of want and do," another person said. "He will do what it takes to achieve what he's after and if that rubs people the wrong way, it's only because they're frustrated that they didn't do it themselves. I think 'ruffle feathers' is really a code word for either envy or frustration."

One person who has known Khan since "back when he was a dorky equity analyst" says he has remained a down-to-earth and thoughtful person over the years.

"He's still kind of got that nerdy thing to him," the person said. "He's not a glitzy guy."

With Imran, there is no gap between the concept of want and do.

So a few years ago when Snapchat — then a three-year-old company with a 24-year-old CEO who had already turned down a $3 billion offer from Facebook — came knocking, Khan went for it.

While his closeness with Wall Street and experience with Alibaba was widely interpreted as an indication that the company would one day look to go public, his role has been to direct the company's business strategy.

He helped grow Snap's revenue from $58.7 million at the end of 2015 to $404.5 million at the end of 2016. The company launched Snapchat Partners, an advertising API, over the summer to expand the advertising business.

"He never assumes that something is just going to happen for him," one person said. "He doesn't sort of sit back and say, 'Maybe the phone will ring.' I think he showed that at Snapchat and the way he pursued the business relationships and built up the marketing side of the business."

Khan has also been working with the chief financial officer, Drew Vollero, to quarterback the bankers on the deal.

No kowtowing

Bankers who know Khan said he has stayed in touch since moving to Snapchat, but not as much as he used to.

"He's become more private since working at Snapchat," one person said, noting CEO Evan Spiegel's penchant for secrecy.

Snap's lead underwriters are Morgan Stanley — which arranged a credit facility for the company in September — and Goldman Sachs.

Despite Khan's having worked for Credit Suisse, Snap did not choose that firm for a lead role. Instead, it went with two firms that had given Khan a hard time during the Alibaba IPO. (Credit Suisse is still on the deal, however, along with JPMorgan, Deutsche Bank, Allen & Company, and Barclays.)

"What's interesting is there's no love lost with Morgan and Goldman [and Khan]," one person familiar with the matter said. Bankers from Morgan Stanley and Goldman Sachs would blame Khan for everything that went wrong on Alibaba, the person said, dismissing him as a research analyst who didn't know anything about banking.

"I'm shocked he didn't penalize them more," the person said.

Regardless of the former colleagues who loved or envied him, Khan holds all the cards now. 

"If Goldman and Morgan Stanley are on a deal where the company is not so hot, they can dictate what happens. In this case, the client can dictate everything," another person said. "Snap is not going to kowtow to any of these people."

SEE ALSO: Snap files for its IPO, revealing surging sales growth and huge losses

Join the conversation about this story »

NOW WATCH: Harvard economist Rogoff explains why he is so optimistic about the economy under President Trump

LONDON – Credit Suisse posted a loss of 2.35 billion Swiss francs ($2.34 billion) for the last three months of 2016, a bigger hit than the 2.07 billion francs estimated by seven analysts surveyed by Bloomberg.

The bank must pay $5.3 billion to settle a US Department of Justice investigation into the behaviour of its residential mortgages division leading up to the 2008 financial crisis Under the terms of the settlement, pushing the lender to a loss for the year.

CEO Tidjane Thiam said: "We have reached an agreement with the US Department of Justice on the RMBS matter, thus removing a major source of uncertainty for our future."

Despite the litigation cost, Credit Suisse managed to maintain a high capital ratio, which is an indicator of how well the bank can weather losses in the future.

The lender had a ratio of 11.6%, down from 12.5% before the DOJ settlement but higher than the 10.2% ratio when the bank's new strategy began in October 2015.

Like many European investment banks, Credit Suisse has had to rethink its business model in an environment of low interest rates, low economic growth and increased regulation.

The bank's CEO, Tidjane Thiam, has tried to steer away from the capital-intensive markets business towards providing more services for high-net worth individuals. Credit Suisse committed to slashing headcount by 6,000 people in 2016.

"2016 was the first full year of implementing our new strategy and it was a challenging and busy 12 months," Thiam said.

"Thanks to our strong client franchise and the dedication of our teams, we have made good progress on our key objectives."

Join the conversation about this story »

NOW WATCH: Michael Lewis reveals why some Germans are obsessed with 'human feces'

At the end of 1899, both Queen Victoria and Czar Nicholas II still sat on their respective thrones, William McKinley was the 25th American President, and Germany had not even been unified for 30 years.

Notably, all these countries had some of the world's largest stock markets at the time.

Credit Suisse recently shared with clients a summary of their "Yearbook" report, which looks at the past 117 years of investment history for 23 countries, including the United States, Canada, ten eurozone nations (Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal, and Spain), six non-eurozone European nations (the United Kingdom, Denmark, Norway, Russia, Sweden, and Switzerland), four Asia Pacific markets (Australia, China, Japan, and New Zealand), and South Africa.

Within the report, the team included two charts comparing the relative sizes of global stock markets at the end of 1899 to those at the end of 2016. 

At the end of 1899, the UK equity market was the largest in the world by market capitalization, with a full 25% of the global total, followed by the US at 15% and then Germany with 13%. The US market overtook the UK during the 20th century, and has since ballooned into the world's dominant stock market, representing 53.2% of global capitalization at the end of 2016. But, Japan had the world's largest market for a hot second: At the start of 1990, it made up almost 45% of the world index, above the United States' 30%, according to Credit Suisse's data.

"Our 23 countries accounted for 98% of world equity market capitalization at the start of 1900, and today they still represent some 91% of the investable universe," the team wrote.

As an interesting aside that Credit Suisse did not go into, the relative size of stock markets somewhat (but not entirely) mirrors the relative geopolitical positions of countries on the global stage.

For example, the UK's stock market was the largest at the end of 1899 near the end of Queen Victoria's reign and the "Britain's imperial century." But its relative size shrank after the two World Wars and during the Pax Americana.

In any case, check out the two charts (Note: "Smaller Yearbook" includes countries from among those listed above who had small enough markets to be grouped together, while "not in Yearbook" represents mostly emerging market countries for which the team did not have data going back to 1900.)

SEE ALSO: 2017 is going to be stacked for China, and Trump isn't even the half of it

Join the conversation about this story »

LONDON – The global bond market has been on unstoppable run for almost four decades, earning a real return of 856% since 1982, according to a report by Credit Suisse.

The Swiss investment bank, along with London Business School, analysed the real return of the world bond index since 1900.

From 1982 until the end of 2015, the return was 7.9% a year, despite periods of volatility.

"There were obviously setbacks, but world bonds gave positive real returns in 26 of the 34 years," Credit Suisse said in the report. 

A period of relatively stable economic growth, low inflation and advances in pricing and market technology combined to create a golden age for bonds. When financial markets looked wobbly, such as during periods since the 2008 financial crisis, central banks have stepped in to purchase hundreds of billions of government bonds, helping to propel the index even higher.

In the words of Credit Suisse, bonds have "produced equity-like performance, yet with much lower volatility in an apparent violation of the law of risk and return."

Here is the chart:

The past 35 years have been exceptional. Before the 1980s, bonds had a difficult past, especially during periods of high inflation and war. Bonds have fixed returns, in the form of interest, and so are generally shunned by investors when prices are rising.

Between 1900 and 1982, the average annualized real bond return across the 21 major economies was just 1.0% per year.

The question facing investors is how long this golden age will last. Credit Suisse said "extrapolating these high returns into the future would be fantasy."

"They have arisen from non-repeatable factors, and future returns are likely to be far lower," the analysts said. "More generally, this is a further example of the importance of looking at very long periods of history in order to understand markets. Even periods as long as three or four decades can be quite misleading if naively extrapolated."

Join the conversation about this story »

NOW WATCH: What prosecutors have to prove in order for you to be charged with a financial crime

In January, Cowles said "our issue is with our broker-dealer which is located in the UK and it will lose, presumably, passporting rights,"at a banking conference in Ireland. 

In the days after May's speech signalling her desire for a so-called hard Brexit, HSBC, JPMorgan, and UBS have all warned about job relocations.

Jamie Dimon, CEO of JPMorgan Chase, told Bloomberg at Davos that the bank will likely move more people than previously thought. "It looks like there will be more job movement than we hoped for," Dimon said. The bank employs 16,000 people in the UK. 

Join the conversation about this story »

NOW WATCH: 'Shark Tank' star Daymond John: Making products in the US could cost consumers 25-30% more

NEW YORK (Reuters) - JPMorgan Chase & Co, Microsoft, Intel, and more than two dozen other companies have teamed up to develop standards and technology to make it easier for enterprises to use blockchain code Ethereum in the latest push by large firms to move toward distributed ledger systems.

The Enterprise Ethereum Alliance (EEA) will work to enhance the privacy, security and scalability of the Ethereum blockchain, making it better suited to business applications, according to the founding companies, which said they plan to announce the initiative on Tuesday.

Members of the 30-strong group also include Accenture, Banco Santander, BP, Credit Suisse, UBS, BBVA, ING, Bank of New York Mellon, Thomson Reuters, and startups ConsenSys and BlockApps.

The EEA joins a growing list of joint initiatives by large companies aiming to take advantage of blockchain, a shared digital record of transactions that is maintained by a network of computers rather than a centralized authority.

Companies in a wide range of industries are hoping that it can help them streamline some of their processes, such as the clearing and settling of financial securities.

About 70 financial firms are involved with R3 CEV, a New York-based startup focused on developing blockchain technology for the finance industry, while technology firms such as IBM and Hitachi are part of the Hyperledger Project, a group led by the Linux Foundation.

The EEA underscores the enthusiasm around the nascent technology, but also highlights some of the hurdles that companies must still overcome before they can deploy blockchain on a large scale. This includes ensuring that the technology can support the vast number of transactions processed by large corporations, while being secure enough to meet their stringent security standards.

Unlike some other collaborative efforts, members do not need to pay a fee to participate in the EEA, for now.

Ethereum, a type of blockchain that can be used to develop decentralized applications, was invented by 23-year-old programer Vitalik Buterin. Several banks have already adapted Ethereum to develop and test blockchain trading applications.

Alex Batlin, global blockchain lead at BNY Mellon, one of the companies on the EEA board, said over the past few years banks and other enterprises have increased collaboration with the Ethereum development community, facilitating the creation of the EEA.

"There is a lot more synergy in thinking than was ever possible before," Batlin said.

The EEA will collaborate with the non-profit foundation that promotes the development of Ethereum, the companies said.

(Reporting by Anna Irrera; Editing by Bill Rigby)

SEE ALSO: David Cameron wants to use blockchain technology to fight government corruption

DON'T MISS: The University of Edinburgh is launching a blockchain research lab with one of the cofounders of Ethereum

Join the conversation about this story »

When Snapchat's parent company, Snap Inc., begins trading on the New York Stock Exchange on Thursday, its sale will prove a windfall for a handful of executives who helped grow the company from a tiny startup to a $24 billion juggernaut in five years.

That includes one unlikely addition: chief strategy officer Imran Khan.

Khan, only at Snap for about two years, has been granted $145 million worth of shares, the company said in a filing on February 2. Those shares will most likely be worth a lot more at the IPO price. And he was paid a $5 million bonus last year.

Not bad for a guy who, not long ago, was working for "some bucket research shop." That's how one Wall Streeter described Khan's early career. (He did indeed work at a small company, called Fulcrum Global Partners, until about 2004; it shut its doors in 2006.)

Khan, 39, joined Snap in early 2015, in part to help chart the company's path to an initial public offering, though his official role has been to build up revenue, expand the business, and run ad sales.

He was hired from Credit Suisse, where he was head of global internet investment banking and was perhaps best known for his leading role on the initial public offering of the Chinese e-commerce giant Alibaba Group in 2014, the largest share sale ever.

His move to Snap made headlines, but Khan is not the only Wall Streeter to wind up playing the "grown-up" in a technology startup. Anthony Noto, once the head of technology banking at Goldman Sachs, was already Twitter's finance chief. Ruth Porat would make the move from Morgan Stanley to Alphabet, Google's parent.

For Khan, this wasn't the first major pivot in his then-15-year career.

'A very strategic thinker'

Business Insider spoke with six executives who worked directly with Khan at various points in his career. They all asked not to be identified for this story. Through a spokesman, Khan declined to comment for this story.

Khan's career has taken him from an investment-banking job at ING Barings, the Dutch financial-services firm, to conducting sell-side research at JPMorgan and eventually running the technology banking franchise at Credit Suisse.

His former colleagues describe him as ambitious and strategic in his career choices. Though most spoke in friendly terms, it's clear that his rise and transition from research analyst to internet banker and now tech-industry millionaire rubbed some the wrong way. One person, for example, felt that Khan failed to credit others for helping him make the switch from research to banking, saying Khan "clawed his way up."

But that kind of talk was dismissed by other colleagues as plain old jealousy among bankers who once would've been peers but perhaps have found themselves courting Khan for a role on Snap's IPO, likely to be the biggest tech flotation since Alibaba's sale in September 2014.

Born and raised in Bangladesh, Khan came to the US as a student; he graduated from the University of Denver's Daniels College of Business in 2000.

After a stint at a tiny Denver-based satellite-broadband startup called WildBlue, he wound up at ING Barings in New York in 2000, according to his profile on BrokerCheck. After the banking business was sold to ABN Amro in 2001, he wound up at Fulcrum (the "bucket research shop"). There, he began to conduct "sell-side" research on technology companies such as Yahoo, Amazon, and eBay.

In 2004, Khan moved to JPMorgan, where he eventually became head of global internet and US entertainment equity research. He has been described as steeped in the tech industry, close to executives, and is married to an executive at an Amazon-owned e-commerce company.

At JPMorgan, Khan became one of the top-ranked internet analysts on the Street, landing the coveted top or second spot in Institutional Investor's annual rankings of researchers. He was also one of the youngest managing directors at JPMorgan, having attained the title at 29.

Khan's meteoric rise and the accolades were carefully cultivated, one person said.

"He's a very strategic thinker," the person said. "He's the type of guy who ranked at JPMorgan as a research analyst not because he's the smartest guy or the best stock picker ... but he's a very affable, likable guy. He knew how to work the system."

This person said that Khan would build up relationships with company CEOs so that he could get the first question on quarterly-earnings calls. "He's always thinking about that stuff."

'A testament to his scrappiness'

That strategic thinking soon had Khan building relationships with China's budding technology companies, which were flocking to the US IPO market in the mid-2000s. The payoff on those came with his first big switch.

He felt like a banker in a research analyst's clothing.

In 2011, after six years with JPMorgan, Khan moved to Credit Suisse to take over the company's internet-banking franchise. It was Alibaba cofounder Joe Tsai who referred Khan to Credit Suisse and encouraged him to transition from an analyst to a banker, three people said.

Still, it was a risk for Credit Suisse to pull a research analyst over to run a critical investment-banking division. Khan was placed under the wing of Bill Brady, then the chairman of the bank's global technology investment-banking group, two people said. Brady now does that job at Jefferies.

"A bevvy of people who made that transition were total failures," one person said. "Imran was more commercial — he felt like a banker in a research analyst's clothing."

With Khan on board, and Chinese companies coming back to the US markets, Credit Suisse's tech-banking team started to land key deals. As the firm's head internet banker, Khan worked on the IPOs of Groupon, GoDaddy, Box, and the Chinese companies Weibo and Toudu. Most notable, of course, was Alibaba's $25 billion flotation.

"Imran is very good in front of people," one person said. "He's charming, he's very smart, he can connect with people right away."

Another person credited his success with a "work ethic and energy level" that was "off the charts" and an entrepreneurial spirit that stood out.

Credit Suisse's leadership role on the Alibaba deal makes up a big part of Khan's professional legacy. When he moved to Snap, The Wall Street Journal called him a "star tech banker." But three people told Business Insider that they felt he received more credit for that role than he was due, emphasizing that it was a team effort.

Credit Suisse's relationship with Alibaba predates Khan's arrival, they point out, and laid mostly with Vikram Malhotra, then the head of investment banking for Asia Pacific, and Boon Sims, who was global head of mergers and acquisitions.

But even those who credit Malhotra for winning Credit Suisse the business said there was no bad blood between the two men. The two bankers worked hand in hand on the deal, speaking every day, and they are still close, one person said.

Imran stood out because he is the type of person who likes the spotlight, while Malhotra does not, another said.

Khan's ability to put himself in position to run the deal was "a testament to his scrappiness and finding opportunities and seizing opportunities," another person said.

One person who has known Khan since "back when he was a dorky equity analyst" says he has remained a down-to-earth and thoughtful person over the years.

"He's still kind of got that nerdy thing to him," the person said. "He's not a glitzy guy."

Targeted moves

Still, Khan's perceived opportunism has "probably rubbed some people the wrong way," one former colleague said.

"I think he's a good guy — a great guy," this person added. "I think he made a lot of moves that were very targeted and focused."

Once Imran has decided he wants to get somewhere, he is very good at figuring out what he needs to do to get there, this person said.

"If he can position himself and get recognized as the man behind Alibaba, which he did by getting into the paper and onto TV — at that point he knew that was the best time to make a move and do something."

"With Imran, there is no gap between the concept of want and do," another person said. "He will do what it takes to achieve what he's after, and if that rubs people the wrong way, it's only because they're frustrated that they didn't do it themselves. I think 'ruffle feathers' is really a code word for either envy or frustration."

With Imran, there is no gap between the concept of want and do.

A few years ago when Snapchat — then a three-year-old company with a 24-year-old CEO who had already turned down a $3 billion offer from Facebook — came knocking, Khan went for it.

While his closeness with Wall Street and experience with Alibaba was widely interpreted as an indication that the company would one day look to go public, his role has been to direct the company's business strategy.

He helped grow Snap's revenue from $58.7 million at the end of 2015 to $404.5 million at the end of 2016. The company launched Snapchat Partners, an advertising API, over the summer to expand the advertising business. Goldman Sachs, one of the banks on Snap's IPO, is predicting that Snap's revenue will rise to $2 billion by 2018.

"He never assumes that something is just going to happen for him," one person said. "He doesn't sort of sit back and say, 'Maybe the phone will ring.' I think he showed that at Snapchat and the way he pursued the business relationships and built up the marketing side of the business."

Khan has also been working with the chief financial officer, Drew Vollero, to quarterback the bankers on the deal.

No kowtowing

Bankers who know Khan said he has stayed in touch since moving to Snapchat, but not as much as he used to.

"He's become more private since working at Snapchat," one person said, noting CEO Evan Spiegel's penchant for secrecy.

Snap's lead underwriters are Morgan Stanley — which arranged a credit facility for the company in September — and Goldman Sachs.

Despite Khan's having worked for Credit Suisse, Snap did not choose that firm for a lead role. Instead, it went with two firms that had given Khan a hard time during the Alibaba IPO. (Credit Suisse is still on the deal, however, along with JPMorgan, Deutsche Bank, Allen & Company, and Barclays.)

"What's interesting is there's no love lost with Morgan and Goldman" and Khan, one person familiar with the matter said. Bankers from Morgan Stanley and Goldman Sachs would blame Khan for everything that went wrong on Alibaba, the person said, dismissing him as a research analyst who didn't know anything about banking.

"I'm shocked he didn't penalize them more," the person said.

Regardless of the former colleagues who loved or envied him, Khan holds all the cards now.

"If Goldman and Morgan Stanley are on a deal where the company is not so hot, they can dictate what happens," another person said. "In this case, the client can dictate everything."

SEE ALSO: Snap files for its IPO, revealing surging sales growth and huge losses

Join the conversation about this story »

NOW WATCH: Grey Gardens — the famous subject of a documentary, HBO film, and Broadway musical — is on sale for nearly $20 million

Manchester United's big summer spending may become a thing of the past after investment bank Credit Suisse predicted that the club's transfer budget will be slashed in the coming years.

In a note circulated to clients, Credit Suisse said Manchester United's outlay on players will almost halve by 2020 as the team becomes more stable in the post-Sir Alex Ferguson era.

"We assume capex [capital expenditure] will decline from this year's £130 million to £70 million by 2020 as a period of elevated investment in the squad following Sir Alex Ferguson's departure normalises," the investment bank said.

Here's the forecast in a graph:

In manager Jose Mourinho's first summer transfer window at Old Trafford last year, United broke its transfer fee record to sign midfielder Paul Pogba for £89 million from Juventus.

The club also acquired Eric Bailly from Villarreal, Henrikh Mkhitaryan from Borussia Dortmund, and though Zlatan Ibrahimovic arrived on a free transfer his annual salary still accounts for £11.4 million from the wage budget.

In recent weeks, Manchester United has been linked with Real Madrid midfielder Toni Kroos, Atletico Madrid striker Antoine Griezmann, and Benfica defender Victor Lindelöf, according to reports from the Manchester Evening News, Marca, and The Sun.

Mourinho may be able to sign all of his transfer targets, with Credit Suisse forecasting net player expenditure will step up to £137 million this year, but the investment bank warned subsequent spending will "fall back to £70 million by 2020."

Join the conversation about this story »

NOW WATCH: The reason millennials became obsessed with payment app Venmo has nothing to do with money

Zurich (AFP) - France's Marine Le Pen is the biggest risk to European stability, Credit Suisse said in a guide launched Thursday to help investors navigate the upcoming "defining" months facing the continent.

Analysing possible outcomes in the Dutch, French and German elections as well as Britain's triggering of Article 50 to kick-start Brexit and Greece's debt negotiations, Credit Suisse strategists offered three scenarios for Europe's immediate future. 

Scenario one, billed as "positive" by Switzerland's number two bank, sees pro-European, centrist candidates winning in France and Germany when the key continental powers vote in April and September, respectively. 

This scenario also envisages a "benign outcome" empowering a stable coalition in next week's Dutch vote, with anti-establishment and anti-Islam politician Geert Wilders' Freedom Party currently slumping in the polls.

The "central scenario" sees the Greek bailout negotiations "drag on" through the summer without definitive resolution and struggles in the Dutch parliament to form a coalition. 

In this scenario, France's centrist and upstart candidate Emmanuel Macron wins the country's presidential election but has trouble carving out a governing mandate. 

The "negative" option has Greece struggle for more debt funding and anti-immigration nationalist Le Pen of the National Front elected president of France. 

"Credit Suisse strategists take the view that the French presidential election... poses the most important risk for Europe this year," the bank said in a statement, referring to the April 23 vote, with a second round set for May 7 if needed. 

"Any narrowing of the polls in Le Pen's favour will create a high degree of volatility in the markets," it added. 

Credit Suisse said it will update its "Risk Barometer" regularly to reflect levels of systemic risk in European bond and equity markets. 

Overall, the bank considers it "unlikely" that any country will leave the eurozone but warned that "institutional safeguards against a euro break-up remain incomplete."

Join the conversation about this story »

Nearly every global bank is experimenting with blockchain technology as they try to unleash the cost savings and operational efficiencies it promises to deliver. 

Banks are exploring the technology in a number of ways, including through partnerships with fintechs, membership in global consortia, and via the building of their own in-house solutions. 

In this report, BI Intelligence outlines why and in what ways banks are exploring blockchain technology, provides details on three major banks' blockchain efforts based on in-depth interviews, and highlights other notable blockchain-based experiments underway by global banks. It also discusses the likely trends that will emerge in the technology over the next several years, and the factors that will be critical to the success of banks implementing blockchain-based solutions.

Here are some of the key takeaways from the report:

• Most banks are exploring the use of blockchain technology in order to streamline processes and cut costs. However, they are also looking to leverage additional advantages, including increased competitiveness with fintechs, and the ability to use the technology to create new business models. 
• Banks are starting to narrow their focus, and are increasingly honing in on tangible use cases for blockchain technology that solve real problems faced by their businesses. 
• Regulators are taking an increased interest in blockchain technology, and they're working alongside major banks to develop regulatory frameworks. 
• Blockchain-based solutions will start to emerge in different areas of financial services. The most successful solutions will solve specific problems for banks and attract a large enough network to create widespread benefits. 

 In full, the report:

• Outlines banks' experiments with blockchain technology. 
• Details blockchain projects at three major banks — UBS, Credit Suisse, and Banco Santander — based on in-depth interviews. 
• Discusses the likely trends that will emerge in the technology over the next several years.
• Highlights the factors that will be critical to the success of banks implementing blockchain-based solutions.

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >>Learn More Now
2. Purchase & download the full report from our research store. >> Purchase & Download Now

Join the conversation about this story »

LONDON — Before the 2008 financial crisis, jobs in investment banking and trading were the most sought after by young people interested in finance.

But tougher capital rules and bonus restrictions, as well as weaker economic growth in the US and Europe, have taken the sheen off these areas and caused large banks to change their business models.

Credit Suisse is a good example, cutting back in markets and switching focus to private banking, particularly in the Asia-Pacific region.

So what is it like for a young person working in a bank like Credit Suisse in 2017?

Henri Etchegoyen is one of the Swiss lender's private bankers in London. He is a relationship manager, tasked with building a UK clientele and looking after existing customers. Here is how his typical workday goes:

Meet Henri Etchegoyen, 28, pictured here in the Credit Suisse office cafe. He joined the bank as an intern, working his way up to analyst and finally relationship manager in the private bank. Etchegoyen went through an 18-month training programme in Zurich, taking internal exams and tests from the Financial Conduct Authority to be approved for the role.

On Mondays, Etchegoyen gets into work for an 8 a.m. meeting at the Credit Suisse Canary Wharf office after a commute of about 45 minutes. At the meeting, the private-banking team gets a markets update and discusses investing strategies and ideas.

After that, Etchegoyen often has a lot of external meetings, both with prospective clients and existing ones. Many of those take the form of coffees and lunches around Mayfair, where Credit Suisse has a private-banking office.

LONDON — Credit Suisse CEO Tidjane Thiam's compensation package for 2016 totalled 11.90 million Swiss francs (£9.6 million, $12 million), the bank's annual report shows.

The report, published on Friday, shows Thiam earned a bonus of CHF 8.22 million (£6.66 million, $8.2 million) on top of a CHF 3.68 million (£2.9 million, $3.7 million) fixed compensation package. The bonus is a mixture of both short-term and long-term incentive schemes and CHF 6.13 million (£4.9 million, $6.1 million) of Thiam's bonus will be deferred. 

The remuneration package represents a rise in take-home pay for Thiam, who was the highest paid executive last year. He joined Credit Suisse as CEO in June 2015 and earned CHF 4.57 million (£3.69 million, $4.6 million) for the 6 months to the end of that year, which would have worked out at CHF 9.14 million (£7.3 million, $9.2 million) for the year.

The rise comes despite a net loss of CHF 2.7 billion (£2.1 billion, $2.7 billion) for Credit Suisse last year. The bank was hit by a $5.3 billion (£4.2 billion) settlement with the US Department of Justice over allegations of misselling mortgage-backed securities in the run-up to the financial crisis.

Credit Suisse's compensation committee says Thiam's bonus award reflects his "significant achievement made in reducing the Group’s cost base, with net cost savings achieved in 2016 exceeding the target for the year."

The committee adds that Thiam has "led the Group to a stronger capital position" and hailed his "sound leadership, careful and measured approach, and success in formulating and driving the Group towards one cohesive, client-centric bank, focused on profitable, sustainable and compliant growth."

Credit Suisse's total bonus pool rose to CHF 3.09 billion (£2.5 billion, $3.1 billion) last year, up from CHF 2.92 billion (£2.3 billion, $2.9 billion) in 2015. 43,412 employees across the group got a bonus last year, up from 43,225 in 2015.

The bank says in its report that the increase "reflected the impact of strategic hiring in high-growth business areas as well as necessary adjustments to certain divisional pools to align compensation levels with the market."

Join the conversation about this story »

NOW WATCH: These are the states you should live in to pay the least taxes

The global equity strategy team at Credit Suisse thinks the bull market in stocks is not yet over. But that's not stopping them from contemplating what the end would look like. 

Join the conversation about this story »

NOW WATCH: A Navy SEAL explains why you should end a shower with cold water

LONDON (Reuters) - Credit Suisse has taken out adverts in British Sunday newspapers stressing a zero-tolerance policy on tax evasion, as the Swiss bank tries to limit any damage to its reputation from raids on three of its offices.

Zurich-based Credit Suisse was pulled into an international tax evasion and money laundering investigation on Thursday when coordinated searches were carried out on its London, Paris and Amsterdam offices.

The ads, which appeared in the Sunday Times, Sunday Telegraph and Observer, stated they were a "response to recent reports about tax probes in various European countries".

Among seven bullet points, Credit Suisse said it "wishes to conduct business with clients that have paid their taxes" and the bank would "continue to work closely with the local authorities in all matters and particularly in this new case".

The raids reopened the thorny issue of tax evasion which has dogged Swiss banks for years as wealthy individuals around the world have used the country's strict bank secrecy laws to hide cash from the tax man.

Credit Suisse, Switzerland's second-biggest bank, in 2014 pleaded guilty and was fined $2.6 billion by U.S. authorities over charges it helped wealthy Americans evade taxes. It has also settled tax dodging cases in Italy and Germany.

(Reporting by Paul Sandle; Writing by Joshua Franklin in Zurich; Editing by Mark Potter)

Join the conversation about this story »

Want to know the most popular US stocks among active fund managers?

A Credit Suisse team led by Lori Calvasina looked at "long only, actively managed" small-, mid-, and large-cap funds to find the answer.

Microsoft was the most crowded US stock, with 378 large-cap funds holding long positions. Apple (369) and Google (352) were close behind.

The Credit Suisse team says its ranking, which incorporates holdings of both retail and institutional funds, is more robust than other studies.

The bank advised that "as a general rule, we tend to be wary of owning too many Darlings given less opportunity for differentiation, and potential for underperformance if bad news emerges."

We present the 12 most popular US stocks among large-cap funds, according to Credit Suisse, below.

12. Merck & Co.

Ticker: MRK

Industry group: Pharma, biotech

Market cap: $174.2 billion

No. of large-cap funds: 227

1Q '17 to-date performance: 7.8%

Source: Credit Suisse

Click here for a real-time Merck & Co. chart.

11. Home Depot

Ticker: HD

Industry group: Retailing

Market cap: $176.8 billion

No. of large-cap funds: 230

1Q '17 to-date performance: 9.6%

Source: Credit Suisse

Click here for a real-time Home Depot chart.

10. Amazon

Ticker: AMZN

Industry group: Retailing

Market cap: $418.1 billion

No. of large-cap funds: 231

1Q '17 to-date performance: 16.9%

Source: Credit Suisse

Click here for a real-time Amazon chart.

Credit Suisse just published a list of its top US stock picks.

The Swiss bank asked every analyst to pick up to three stock picks based on a six- to 12-month time horizon, and ended up with 142 names. Of those 142 names, 13 were listed on the US focus list.  

The US focus list is a compilation of the analysts' "highest conviction catalyst driven ideas."

"The list is assembled bottom up, reflecting our analysts’ most favored and differentiated ideas," the bank said in a note. 

This month, US Foods was added and Whole Foods Market was removed. 

Credit Suisse noted, "We are positive on the food service industry and see particularly attractive value in USFD given its strong growth outlook."

Here they are:

Apple

Ticker: AAPL

Sector: Technology

Closing Price on April 4: $143.70

Price Target: $160.00

Performance over last year: +31.64%

Get real-time Apple charts here 

Blackstone

Ticker: BX

Sector: Asset Management 

Closing Price on April 4: $29.64

Price Target: $40.00

Performance over last year: +9.51%

Get real-time Blackstone charts here 

Celgene

Ticker: CELG

Sector: Biotechnology/Healthcare 

Closing Price on April 4: $124.77

Price Target: $148.00

Performance over last year: +22.31%

Get real time Celgene charts here 

Across the brick-and-mortar retail industry, firms are closing stores at a rapid clip in order to cut costs amid shifting consumer preferences and the rise of e-commerce. 

As reported by Business Insider's Hayley Peterson on March 10, nearly 1,700 store closings have been announced since the beginning of 2017 by retailers such as Macy's, Sears, and JCPenney.

And high-end retailers are not immune to the mounting death spiral of traditional brick-and-mortar stores. On Tuesday, Ralph Lauren announced the closure of its flagship store on Manhattan's Fifth Avenue. 

In a note to clients out Tuesday, a group of Credit Suisse analysts said the move doesn't instill much confidence, but it doesn't drastically change the bank's opinion of the firm's stock. 

"Closing the NYC Polo flag, another ecom strategy pivot, and another round of cost cuts don’t boost our conviction that F4Q trends improved much," the bank said.

"That said, despite our broader checks that RL F4Q trends remained sluggish, recent checks suggest RL has started to outperform broader department store industry trends in some US channels," the bank added. "Despite RL's negative stock reaction, we believe Consensus numbers are unlikely to change on this news."

Credit Suisse said the move is part of an extension of the firm's "Way Forward Plan," which also includes a "transition to a new e-commerce platform" and "cost cuts."

Credit Suisse views the savings as not much of a surprise. "While RL upsized annualized cost savings by an incremental $140m—implying FY20 annual cost savings of $585m (vs $445m previously)—we believe the saves were included in initial FY18 guidance from the Feb call (e.g. no change to our ests)," the bank said.

"We're surprised RL is already closing the Polo flag (opened 10/14). While it's intuitive to us that deteriorating tourism contributed to sales well below plan, we think the store was highly cannibalistic to the nearby Madison Ave flag," the bank added.

As such, Credit Suisse is maintaining its $5.15 earnings per share estimate, along with a price target of $76 per share, below the clothing retailer's current market price of $79.16 per share.

SEE ALSO: We visited Ralph Lauren's flagship Polo store hours after the company said it would close

Join the conversation about this story »

NOW WATCH: Children who eat too much sugar are developing diseases that only alcoholics used to get

A top trader at Credit Suisse just quit to take a role at JPMorgan.

Matt Mallgrave, head of US equity flow trading at Credit Suisse, resigned today, according to people familiar with the matter. He is set to join JPMorgan, the people said.

Credit Suisse declined to comment. JPMorgan did not comment in time for publication, and Mallgrave didn't return a phone call requesting comment. 

Mallgrave was at Credit Suisse for a little over a year, having quit his role at Goldman Sachs in late 2015 to join the Swiss bank.

A Harvard graduate, Mallgrave was selected by the Toronto Maple Leafs in the 1988 NHL draft.

The equities business in which Mallgrave worked has been an area of focus for JPMorgan. Cash equities is the one business where the bank doesn't rank inside the top three in industry revenue rankings compiled by Coalition, a data tracker.

Daniel Pinto, the head of JPMorgan's corporate and investment bank, said at the bank's February investor day that JPMorgan's equities and prime finance business had increased its market share from 6.9% in 2010 to 10.1% in 2016. Cash equities revenues fell 4% from 2014 to 2016, while industry revenues fell 18%. 

Join the conversation about this story »

NOW WATCH: Robert Shiller on what a rate hike will do to asset prices and who Trump shouldn't put in charge of the fed