Credit Suisse to revamp investment, private banking
Hans-ulrich Meister will lead the combined private banking and wealth management unit
Credit Suisse Group, the secondbiggest Swiss lender, named Gael de Boissard to co-lead its investment bank and said it will merge asset management with the private bank to speed cost-cutting.
De Boissard, 45, will join the executive board and lead the fixedincome business, while current investment bank chief Eric Varvel, 49, will head equities and advisory, the Zurich-based company said in a statement on Tuesday.
Hans-Ulrich Meister, 52, who led the private bank, and Robert Shafir, 54, who headed asset management, will lead the combined private banking and wealth management unit, which will include the Swiss trading business. Credit Suisse Group Chairman Urs Rohner said in a statement, the changes “will better align product development, advice and distribution and they will further reduce complexity across the bank for the benefit of all our clients and stakeholders.”
The reorganization “is mostly about combining activities and sharpening the focus on the cost-saving programs, and that’s really indicative of the wider pressures in the industry,” said Otto Dichtl, managing director at Knight Capital Europe Ltd., in an interview.
Credit Suisse has stuck with a fully-fledged investment bank as UBS AG, the biggest Swiss bank, announced last month it would cut 10,000 jobs and shrink capital-inten- sive debt trading businesses to focus on money management. Credit Suisse said last month it will trim a further 1 billion francs ($1.06 billion) in annual costs by the end of 2015, adding to a 1 billion-franc savings program announced in July and a 2 billion-franc expense reduction achieved since last year.
The new investment bank’s structure “reflects the importance of the equities and investment banking advisory and underwriting businesses and also recognizes the progress we have made in evolving our fixedincome business to the new environment and the strength of this business for Credit Suisse,” Chief Executive Officer Brady Dougan said in the statement. “This streamlined structure will produce further synergies and help reduce expenses across the bank.”
Credit Suisse fell as much as 3.4 percent, and was down 2.4 percent to 21.05 francs by 10:26 a.m. in Swiss trading. The stock has declined 4.6 percent this year, compared with a 29 percent gain in UBS.
The four managers, heading two divisions, will also have regional responsibilities, reducing the number of people on the executive board to nine from 11.
Varvel will run the Asia-Pacific region, while de Boissard will serve as the head of Europe, the Middle East and Africa, the bank said. Osama Abbasi and Fawzi KyriakosSaad, who headed those regions previously, will leave the company, as will Walter Berchtold, 50, chairman of private banking. Meister and Shafir will continue to head Switzerland and the Americas, respectively.
The changes “will better align product development, advice and distribution and they will further reduce complexity across the bank for the benefit of all our clients and stakeholders,” Chairman Urs Rohner, 52, said in the statement. “We are convinced they will help us focus on our strengths in our chosen businesses and markets globally.”
Asset management is the smallest of Credit Suisse’s three divisions and contributed 13 percent to the group’s pretax profit in the first nine months of the year. The bank agreed in 2008 to sell part of its traditional asset-management business, which oversaw about 75 billion francs, to Aberdeen Asset Management Plc. The unit had 368.9 billion francs under management at the end of September, of which 141.8 billion francs is managed for private-banking clients.
Credit Suisse said in July it would sell two private-equity units to comply with new limits on investments in hedge funds and privateequity funds. The bank also said last month it would try to sell the exchange-traded funds business, which had 16.1 billion francs under management at the end of September.
The bank said a year ago it planned to boost pretax profit at the private-banking division by 800 million francs by 2014.