Credit Suisse is chasing a broader set of the global wealthy

CREDIT Suisse Group is shifting resources to win business from a broader range of rich clients, as the lender focuses more heavily on wealth management amid cuts to its troubled investment bank. 

The Zurich-based bank is reassigning advisers to its dedicated Private Banking International unit, led by Raffael Gasser, according to a memo sent to staff Tuesday(Aug 23) seen by Bloomberg. The aim is to expand Credit Suisse’s coverage of global high-net-worth clients in addition to the ultra-wealthy segment, the memo said. 

As many as one third of the relationship managers in Switzerland that don’t currently sit under PBI will be reassigned there, according to a person familiar with the matter. The changes will take place gradually over the next few months, the person said.  

After multiple quarters of poor results and turmoil, new Credit Suisse chief executive officer Ulrich Koerner is working on the second strategy revamp within a year and taking tougher action with the loss-making investment bank. While the lender has signalled intensified focus on wealth management since last year, increased urgency to revamp the business is placing greater importance on the success of that strategy. 

In June, Credit Suisse said that it will focus on extending its high-net-worth coverage model to Hong Kong and Singapore. Given the larger client base and revenue pool compared to the ultra-high net worth segment, which typically refers to clients with at least US$30 million in assets, the bank also said it was aiming to boost recurring revenue from the larger market for those with liquid assets over US$1 million. 

A stronger focus on global wealth management, begun under former chairman and CEO combination of Antonio Horta-Osorio and Thomas Gottstein, also makes Credit Suisse’s strategy more reminiscent of that at Zurich rival UBS Group. There, chief executive officer Ralph Hamers has also been pushing into the lower rungs of wealth with the acquisition of US robo adviser Wealthfront and the restructuring of the bank’s Global Family Office unit.

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Credit Suisse has hired Dixit Joshi, former Deutsche Bank treasurer as chief financial officer, and elevated Francesca McDonagh to operating chief, in the first big leadership reshuffle under Koerner. In November, Credit Suisse outlined a group-wide strategy consisting of shrinking the investment bank and shifting about US$3 billion of capital to the wealth management unit.

McDonagh, the outgoing CEO of Bank of Ireland Group, was originally hired this year to oversee the Europe, Middle East and Africa region when she joins in September. That role will now fall to wealth management head Francesco de Ferrari, who has run the region in the interim.

Credit Suisse said it will provide a restructuring plan for the investment bank by this November, when it reports third-quarter results. One option being discussed is that the investment bank may cease to exist as a separate unit, Bloomberg reported this week. BLOOMBERG