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Credit Suisse Asia chief eyes expansion as regional profit doubles
[HONG KONG] Credit Suisse Group's Asia chief on Thursday said the Swiss bank would consider raising headcount or buying a smaller peer to build up its private banking business, in a region where pretax profit doubled in the first half of this year.
Asia is the world's fastest-growing private banking market, driven largely by China's growing economic clout. China created 1 million new millionaire households last year, according to Boston Consulting Group, bringing the total to 4 million - second only to the United States with 7 million.
But bankers say Asia is the world's most competitive region for hiring staff to cater to the very rich, with salaries driven up by high demand for relationship managers and a scarcity of experienced candidates.
"We are open to opportunities to grow the business via acquisitions," Chief Executive for Asia Pacific Helman Sitohang said in an interview, declining to elaborate.
"There's a challenge industry-wide in Asia for experienced private bankers, but we have a number of solutions including training new staff at our Wealth Institute in Singapore or bringing them in from outside Asia," Mr Sitohang said.
The comments come after the chief executive of three weeks, Tidjane Thiam, earlier in the day said the bank would outline a new strategy by year-end. That strategy is widely expected to push more resources into Asian wealth management and scale back investment banking.
Thiam oversaw the Asian expansion of previous employer Prudential PLC and unsuccessful US$36 billion bid for rival insurer AIA Group Ltd. His latest appointment has raised expectations of similar action at the Swiss bank.
Credit Suisse is Asia's third-largest private wealth manager by assets behind UBS and Citigroup Inc. Of 3730 relationship managers - bankers who advise wealthy clients - just 490 were in Asia at the end of 2014, versus 1186 at UBS.
"Since organic expansion (through hiring) would take too much time, we believe that CS will have to execute acquisitions," Vontobel analyst Andreas Venditti said in a July report.
Mr Sitohang's unit on Thursday posted January-June pretax profit of 873 million Swiss francs.