It is of little surprise that Credit Suisse finally announced the dropping of the Credit Suisse First Boston name yesterday — it had been wi...
It is of little surprise that Credit Suisse finally announced the dropping of the Credit Suisse First Boston name yesterday — it had been widely anticipated by the market since the “one bank” initiative was announced last December, or some insiders might say much earlier.
But now we know the new branding and all the management changes have happened, orchestrated by Oswald Gruebel, the bank’s chief executive, the real challenge awaits Europe’s ninth largest bank -and that is how to grow the business.
All the navel-gazing is over. John Mack’s — the former head of CSFB and latterly co-chief executive with Mr Gruebel — legacy is gone. All the top management team has been appointed, Mr Gruebel is firmly in charge and a new brand has been unveiled. The engine is fully tuned to Formula One levels of performance — now the race is beginning.
But how does Mr Gruebel and his top management negotiate the ever more challenging racetrack of international finance?
Firstly, the new imagine needs to be communicated to the wider audience. So expect a major advertising/branding campaign to be rolled out shortly throughout Europe and beyond. Credit Suisse were not willing to tell WealthBriefing whether the bank was planning such a campaign, but re-branding doesn’t just sit on the shelf until someone notices it.
The new brand needs to be flaunted, or at least discreetly positioned in the right media to project the Credit Suisse new “one bank” image. HSBC and UBS — two big competitors for Credit Suisse in the global wealth management sector — have been spending millions on advertising over the last few years and most brand experts say those millions have been well spent.
But the Credit Suisse image in the meantime has somewhat withered on vine of international brand awareness. Credit Suisse must play a catch-up game with the likes of HSBC and UBS in building its brand image if it wants to compete at an international level.
Secondly, the next step is probably an acquisition or two. Again the Zurich-based bank has not been particularly active in this area. Indeed, in the last three years Credit Suisse has acquired only one financial services firm, Volaris Advisors, a New York based equity-options strategies firm.
Most of the last three years for the bank has been about
disposing parts of the business. This compares with six
acquisitions from 1999 to the end of 2001. (All these
acquisitions and sales are laid out in Credit Suisse’s excellent
Mr Gruebel and his new management team will be acutely aware if he wants to dine at the top table of international finance that he needs to acquire something soon — and something bigger than just a bolt-on like Volaris.
Mr Mack ultimately left the bank because he disagreed with Mr Gruebel on strategy; the American investment banker wanted to merge, or even sell Credit Suisse to another major bank.
Mr Gruebel now has to turn that sentiment — which still has resonance — around and acquire something of noticeable size. He will probably want to wait a while in order to bed down the plethora of changes recently implemented. But time is pressing for Switzerland’s second largest bank in the acquisition stakes.
Finally, there is the matter of developing an onshore wealth management platform, which will compete against its biggest rival, UBS.
Credit Suisse was ahead of the game in the European onshore wealth management market in the early part of this decade, but the strategy was reversed by Mr Gruebel as a too costly affair.
But the cost now to go onshore will be even more prohibitively high as the likes of UBS, ABN Amro and HSBC have been developing their pan-European wealth strategies for a number of years, while Credit Suisse has been dealing with internal matters.
Yet, the brand Credit Suisse still stands for much in the world of finance. Few — even its major competitors — would disagree with this.
The challenge for Mr Gruebel and his newly assembled group of senior managers will be to go out and exploit this brand to the utmost, or Mr Mack might have the final laugh on Credit Suisse’s destiny.