Credit Suisse buoyed by Swiss and Asian clients
Hans-Ulrich Meister, chief executive of Credit Suisse Private Bank, talks about his firm’s geographical aims.
The Swiss market remains one of opportunity, says Meister.
Switzerland, often cited for the predictability and stability of its regulators and central bank, surprised markets last week by unpegging its domestic currency from the euro. The result was a sharp appreciation in the Swiss franc.
“A high level of economic stability with lower, but steady, growth rates, coupled with the sophistication and global access of the Swiss financial market, pose a very attractive market opportunity for Credit Suisse as well as many other international firms,” says Meister.
The country’s wealthy just got richer – good news for the firm, which has been increasing the number of its relationship managers in the country: to 1,670 by the end of the third quarter last year.
“Operating from a position of strength in our home market, Switzerland is very important to us,” says Meister. "This is the only market globally where we offer a full suite of products, from retail to corporate and institutional clients to private clients across all wealth segments.
"In addition, from Switzerland, we support the international development of our Swiss-based clients and utilize the local development of our staff and investments in our infrastructure globally.”
The firm has been addressing its international presence. Last year, it sold its German onshore private banking business to ABN Amro and moved away from servicing the mass-affluent segment in Italy as part of an overall strategy to focus on high-net-worth clients only outside of Switzerland. Meister says the firm is committed to being in Europe, although in the first three quarters of last year it barely took on new assets.
In the US, the firm has struggled to find a position. Last year, the firm pleaded guilty to helping US citizens evade taxes.
Meister, however, says in the US the bank is looking at clients that would benefit from its investment banking platform. It is Asia as well as its home turf that is driving the firm’s growth.
“We remain focused on growth in emerging markets, where we continue to see significant opportunities to deliver the integrated bank to our clients," he says. "In Apac in particular, we have seen strong net new assets during 2014, and expect this to go on.”
Assets increased by 27.2% in the first three quarters of 2014 compared with the same period in 2013. Total AUM in Asia was SFr142 billion of the total SFr864 billion that the firm manages for wealth management clients – including the Swiss retail and affluent business. And SFr16 billion in net new assets of the total SFr23 billion were from Asia in the first three quarters of last year.
Exit of competitors
In Switzerland, the bank added SFr5 billion in the first three quarters of last year and appears to be gaining from the exit of competitors. It has more than doubled year-over-year. Together, Switzerland and Asia made up SFr21 billion of the total SFr23 billion in net new assets.
“We are operating in a highly competitive environment, particularly in terms of our target markets and client segments," says Meister. "But that said, in Switzerland we already have seen close to a 25% reduction in the number of foreign-owned private banks since the peak a few years back.
"A recent independent market study in Switzerland, by KPMG, showed that in the Swiss private banking market only the largest banks have seen profitable growth over the last few years. Internationally, we have seen a number of major global banks exiting their private banking business.”
He says the bank will continue to invest in its branch network in Switzerland.
“While we will close a few locations, we will also open a smaller number of new ones," says Meister. "Maintaining a healthy number of locations is important to serving our retail and corporate clients.”