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Bad bonus omens for Credit Suisse’s APAC private bankers

Credit Suisse may have designated Hong Kong and Singapore as “priority markets” for its wealth management business as recently as June, but the Swiss bank’s Asian franchise isn’t immune from the problems impacting its wider business. On Wednesday, CS announced a cost-cutting programme alongside a CHF1.6bn loss globally for the second quarter and a CHF1.9bn loss for the first half.

In Asia, Q2 net revenues of CHF700m were down 22% year-on-year, and there was a 35% year-on-year decrease for H1.

Private bankers with an eye on their 2022 bonuses will likely be particularly concerned by a 9.7% fall in APAC assets under management to CHF260.3bn.

Despite the patchy Q2, Credit Suisse has plans to expand in Asian private banking, where it employs some 710 relationship managers, more than in any other region, according to data released in June.

For high-net-worth clients, Credit Suisse will “significantly expand” its business model in existing markets while extending it to Hong Kong and Singapore, global wealth head Francesco De Ferrari said during a presentation in late June. He also hinted at new growth areas for jobs serving ultra-high-net-worth clients – including sustainability, private markets, and lending – while describing the strength of wealth generation in Asia as “phenomenal”.

Chief executive Thomas Gottstein said during the Q2 results presentation that Credit Suisse will “continue to invest in” relationship managers as well as in technology, risk and compliance.

And there was one bright spot in Asian wealth amid Credit Suisse’s generally gloomy results: net new assets of CHF2.3bn were up from a net outflow of CHF7bn a year ago.

Elsewhere, Credit Suisse’s APAC investment banking division posted lower rates revenue but higher trading revenue.

The unit also contributed to a 10% increase in compensation and benefits, partly due to “deferred fixed cash compensation granted to certain employees in the Americas and Asia Pacific”.

But although Credit Suisse wants to hold onto top performers via these retention payments, it has also let go of more than two dozen front-line investment bankers in Asia recently, according to Bloomberg.

Photo by Ussama Azam on Unsplash

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AUTHORSimon Mortlock Content Manager

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