Credit Suisse to re­vamp in­vest­ment, pri­vate bank­ing

Hans-ul­rich Meister will lead the com­bined pri­vate bank­ing and wealth man­age­ment unit

The Pak Banker - - Front Page -

ZURICH

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.

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