Credit Suisse upbeat on equity trading
Wall Street veteran heading unit says bank has the resources to be a top- five player
While wealth management may be the business Credit Suisse Group favours growing these days, the Wall Street veteran who took over the bank’s equity trading unit has no intention of taking a back seat.
“We have more than sufficient resources to be a topfive equities player,” equities chief Mike Stewart said in his first interview since taking the job in June. “Right now, the business really is in execution mode. I’ve got my key people in every seat.”
Credit Suisse was the seventhbiggest equity trading house by revenue last year, and a jump into the top five would require it to boost its business by one third. Stewart didn’t give a time frame for his ambition.
Stewart took up his job in the midst of some rocky years for the trading business. Credit Suisse lost almost a third of its trading market share from 2015 to 2017 after a push into Asia backfired, a team wagering on algorithms caused revenue to plunge and historically lowvolatility took a toll on earnings.
Since joining from crosstown rival UBS Group, Stewart has hired at least 18 senior investment bankers at the unit, which caters to institutional investors, hedge funds and insurance companies.
Key hires include Mike Di Iorio, Roger Anerella, David Bleustein, Stuart McGuire, Michael Ebert, Gerry Milligan, Anthony Abenante and Scott Miller.
Stewart, who oversees the global stock- trading business outside of Asia, said he wants to reboot the bank’s business with hedge funds as he improves electronic trading systems and strengthens flows into Credit Suisse’s privatebanking empire.
Credit Suisse took just over 7 per cent of global equity trading revenues in 2017, while the fifth- biggest player, UBS, had 9.5 per cent, according to data compiled by Bloomberg that rank firms within their peer group. Morgan Stanley placed first and had 21 per cent of the business. Credit Suisse held the No 3 spot in 2011.
Credit Suisse was down 1.1 per cent in Zurich trading as of 9: 53am. The stock is up 11 per cent in the last 12months, giving the company a market value of about 40 billion francs ($ 42 billion).
The Swiss lender is in the final stretch of a three- year overhaul to focus more on wealth management. Part of the plan is to strengthen the collaboration between the trading unit and the private bank to offer more tailormade products for the wealthy and provide financing solutions.
Credit Suisse last year set up a unit called International Trading Solutions, a joint venture between the Global Markets unit, international wealth management, led by Iqbal Khan, and the Swiss Universal Bank. Stewart said the joint venture is crucial to boost equity revenue going forward.
While the sudden return of volatility has prompted many banks to rediscover their passion for trading, Stewart said sorting the good performers from the bad has become more crucial.