Strategy
Credit Suisse Confident Of Growth, Puts More Focus On Private Bank - Report
Credit Suisse intends to put more focus on its private banking arm, targeting a larger share of ultra-wealthy clients as tougher regulation and volatile markets dent investment banking returns, senior executives have said.
Credit Suisse intends to put more focus on its private banking arm, targeting a larger share of ultra-wealthy clients as tougher regulation and volatile markets dent investment banking returns, senior executives have told Reuters.
"We haven't systemically taken advantage of all the opportunities that we see with our clients globally," Robert Shafir, co-head of Credit Suisse's private bank, was quoted by the news service as saying in an interview. He took over the unit a year ago.
The bank intends to use its balance sheet to lend more to wealthy individuals and increase its share of ultra-rich clients, typically with asset of more than $50 million (31 million pounds), to roughly half of its overall assets under management, from 44 per cent at present, the report said. "We have a pretty ambitious set of plans in terms of expanding our wallet share on the liability side of the balance sheet with our clients," Shafir is quoted as saying.
Shafir and his co-head Hans-Ulrich Meister want the private bank to account for half of the group's risk-weighted assets, against around a third currently.
"You read and hear a lot of noise about our industry and its transformation, but what you don't hear so much about is the major growth potential it has," Meister told the news service in a separate interview.
They simply did not understand the true and complete interests of global high-net worth individuals," says Sebastian Dovey, managing partner of London-based wealth consultancy Scorpio Partnership.
Swiss rivals such as UBS and Julius Baer are also pursuing a strategy of increasing lending to UHNW clients. In the case of UBS in particular, its focus on its wealth management business comes as part of a strategy to reduce its exposure to investment banking, which has seen heavy losses in recent years.
The news service said Credit Suisse's private banking customers are shy of risk, currently holding an average of 28 per cent of their assets in cash or cash-like products, earning little income for the bank.
