Credit Suisse’s private bank in the UK already has built a regional presence in the country and there are plans to extend it further as part of a long-term strategy, one of the firm’s top executives told this publication.

Credit Suisse’s private bank in the UK already has built a regional presence in the country and there are plans to extend it further as part of a long-term strategy, one of the firm’s top executives told this publication.

The Zurich-listed bank, along with a number of its European and UK peers, such as Société Générale, Coutts and Barclays Wealth, has been developing a regional footprint in the UK, realising that there are strong business opportunities beyond London.

And this commitment will not waver even if economic conditions prove to be difficult on occasion, Richard Killingbeck, head of regional private banking in the UK, told WealthBriefing in a recent interview.

“We need to bring the business forward at a faster pace and that implies more headcount, and more distribution efforts and more of a message to the regions as to what Credit Suisse is and what it does,” he said.

Credit Suisse operates via regional hubs in Birmingham and Manchester. “We probably need one more hub, in the West Country,” Killingbeck said. However, he would not be drawn on more specific details such as the location or timing of any move.

He said that unlike some of the banks that sought to develop wealth management operations in the UK regions about a decade ago, Credit Suisse intends to be in the game for the long haul. Some clients still feel unhappy at the way that firms retreated quickly as soon as economic conditions soured in the early noughties at the end of the dotcom boom, he said.

In the late 1990s, some wealth managers expanded rapidly on the back of the rising stock market, but abruptly retreated when equities crashed in 2000-2001. Consultants sometimes quote the case of Merrill Lynch as an example of the dangers of hasty changes. In the first quarter of 2000 the firm announced a joint venture with HSBC to target mass affluent clients, with a UK programme starting in 2001. However, the project was abandoned about a year later, with some critics claiming the venture did not pay enough heed to local markets. (Source: Global Private Banking and Wealth Management: David Maude, 2006).

A key to a successful regional strategy is developing a strong network, Killingbeck said.

“A lot of our work is about building foundations, building relations with clients, but also with intermediaries – lawyers, accountants and IFAs. We’re looking to bring a bit more structure to what we do than has been the case in the past,  bringing in more of the resources of Credit Suisse,” he continued.

Private client experience

Killingbeck is a relative newcomer to the Swiss firm - he was appointed in March this year – but he has been working with private clients for many years. Killingbeck’s financial services career dates to the mid-1980s, taking in a spell as chief investment officer and chief executive of the investment management business of Singer  & Friedlander, and four years working with HNW private clients at Close Brothers. By and large, about 75 per cent of his clients over the past 15 years have been in the HNW category.

Like other Credit Suisse managers whom this publication has interviewed, Killingbeck lauds the benefits of the “one-bank” model that is operated by the Swiss banking giant, and the close collaboration that exists between the private banking and investment banking business divisions.

Fresh business is typically acquired via liquidity events such as business IPOs or trade sales, with other business coming from winning new clients or persuading clients of other firms to come to Credit Suisse, he said.

He also stressed that, in the current environment with a lack of liquidity events, relationship managers should focus on advising clients on what they really need and developing a strategic advisory relationship with their clients.

“For example, entrepreneurs need help operating businesses and we have provided cash injections to clients who were planning to IPO their firm. This leverages the capabilities of our investment bank,” he said.

He said the issue of counterparty risk and the importance of a bank having strong finances, still weighed heavily on client minds – which is positive for Credit Suisse, given its strong base, Killingbeck said. In its latest results statement, the firm reported a Basel Core Tier 1 capital ratio of 16.1 per cent.

“The one demonstrable impact of the [financial] crisis is that counterparty risk will remain in the forefront of clients’ minds, and this will encourage them to use more than one bank," he said.

To a certain degree, UHNW clients and HNW individuals have been users of more than one bank account to spread risk and seek specialist expertise, but this could also trickle down the financial scale, he added.

(To view another article about private banks in the UK regions, click here).