Strategy

Credit Suisse’s Jeremy Marshall Talks to WealthBriefing About Plans for the UK

Contributing Editor, 23 March 2005

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UK wealth managers are all too aware of one overriding development in the last few years. That is the incredible growth of the UBS wealth ma...

UK wealth managers are all too aware of one overriding development in the last few years. That is the incredible growth of the UBS wealth management machine and how it has emerged from virtually zero to be one of the biggest managers in the onshore UK market. No surprisingly, this has caused some consternation in the offices of Credit Suisse Private Banking in London’s Canary Wharf—UBS’s great rival.

“We don’t dwell on this,” said Jeremy Marshall, chief executive of Credit Suisse’s private banking operations in the UK. “Our strategy is to be the best, rather than the biggest.”

Credit Suisse has always been good at offshore private banking, with probably one of the best cost-income ratios in this business and an impressive ability to grow assets under management. And London is no exception to this, with around 75 per cent of its revenues being generated by the bank’s offshore business here.

Much of this has been generated from the Middle East, where Credit Suisse has a thriving private banking operation.

“The offshore Middle East market is extremely important to us,” said Mr Marshall, who has been a Credit Suisse man since joining in 1988. “It’s around 33 per cent of our business here in London and is growing around 30 per cent a year in terms of revenues and assets.”

The offshore efforts of Credit Suisse run like a well oiled machine and need little more than the odd tweak from time to time, according to Mr Marshall. But what is concentrating the minds of the bank’s wealth managers is developing an onshore strategy for the UK.

“There is a need to raise our profile in the UK,” said Mr Marshall.

Credit Suisse plans to do this in four distinct ways:

  • To focus on the higher end of the market—individuals and families with at least £5 million;
  • Position the bank as a unique one stop shop, which will combine private and investment banking;
  • Try and be “above the fray”. Credit Suisse does not want to compete with clearing banks for ordinary high net worth individuals—it wants to go for clients with more sophisticated needs; and
  • Customize the bank’s solutions—“be more Saville Row and not Marks & Spencer.”

Credit Suisse believes it can effectively use all parts of its business to offer private clients comprehensive products and services much more so than many of its competitors.

“In some ways what we offer in London is a Venn diagram, combining parts of the private bank like lending with parts of the investment bank like derivatives, creating a unique one stop shop,” said Mr Marshall.

The London head of the private bank illustrates this with an example of how Credit Suisse can help an ultra-high net worth client. “If a client calls asking for a mezzanine fund and what do you recommend, we can offer institutional pricing and research, and access to proprietary products,” said Mr Marshall.

He added: “We are able to help entrepreneurs at all aspects of their business such as lending on single stock, flotation advice and private equity. This we can do with our close links with CSFB.”

The holistic approach to private banking fits in with Credit Suisse’s larger “integrated bank” strategy, which was announced at the end of last year by its chief executive Oswald Grübel.

This is designed to combine the current business units of Credit Suisse with Credit Suisse First Boston. Much of the ground work of the strategy was done in London in the last few years when Mr Marshall brought the private clients division of CSFB into Credit Suisse’s private banking business in London.

Unique Brand

Mr Marshall believes Credit Suisse’s brand is a unique selling point and a major benefit to clients and potential clients. “We have a fantastic brand with clearly positive links to the word Swiss—associated with all the quality of trusted Swiss service,” he said.

The INSEAD MBA graduate has also been recruiting actively to develop the private bank’s brand in the UK. “We’ve taken on at least 40 new people during the last few years and very few of our staff have left,” said Mr Marshall.

But if Credit Suisse’s goal in the UK private banking market is to be the best and not the biggest, it is certainly not to be a middle-sized player either. “You don't want to be in the middle when it comes to private banking,” said Mr Marshall.

Although he did not mention any names when it comes to the “middle” private banks, Mr Marshall was willing to say they were likely to be the ones with too much exposure to the Swiss offshore market and without the size to develop other parts of their business.

But if there is an Achilles heal in the midst of Credit Suisse’s private banking strategy in the UK could it be its location—among the gleaming towers of London’s alternative investment banking centre of Canary Wharf where few private bankers dare to set foot?

No, said Mr Marshall. “We have meeting rooms in the City of London and can always use the offices of our subsidiary JO Hambro in St James’s Square (London’s West End).”

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