Credit Suisse plans to double China headcount in five years

Hong Kong

CREDIT Suisse Group plans to double its headcount in China over five years as the firm accelerates its pursuit of the country's wealthy, seeking to move past a scandal that has engulfed once-favoured client and Luckin Coffee founder Lu Zhengyao.

The bank has largely normalised approvals for Chinese companies, ending the increased scrutiny on loans that followed allegations of fabricated earnings at Luckin and a slowdown to weigh the impact of Covid-19.

Credit Suisse will add to its China workforce as it targets a 100 per cent increase in revenue there, Asia chief executive officer Helman Sitohang said. Its China securities venture had 154 staff at the end of last year, and the lender also offers financing, trading, wealth and asset management on the mainland.

Much of the firm's build-out will focus on expanding advisory and investment banking services for the ballooning ranks of China's rich. Mr Sitohang's plans are key to Credit Suisse meeting its goal of doubling the contribution to revenue growth that comes from ultra high net worth strategic clients over the next three years. Separately, the lender has embarked on a wide-ranging assessment of risk controls following a series of deals linked to troubled companies including Luckin.

"China is our strongest focus when it comes to headcount, and infrastructure growth compared to any country in the world," Mr Sitohang said. "The worst of Covid's impact on the region's business activity is behind us," he said, referring to Asia.

Asia's largest economy has the most millionaires after the US and its financial opening this year has presented global banks and asset managers with an unmatched opportunity for expansion. Credit Suisse wants Asia to make up 25 per cent of group revenue in a couple of years, from 17.5 per cent now, people familiar with the matter said, declining to be named discussing internal matters.

The downfall of Starbucks rival Luckin and its billionaire founder blindsided Credit Suisse and other lenders, who are fighting to recoup losses on more than US$500 million in margin loans. The Swiss bank, the lead underwriter for Luckin's public offering, launched an internal review though chief executive officer Thomas Gottstein has said it will continue to target China's wealthy entrepreneurs.

Credit Suisse isn't alone is setting ambitious hiring targets for China and will have to compete with the likes of Goldman Sachs, JPMorgan Chase and others. Goldman Sachs plans to double its headcount to 600 by 2025, while Swiss rival UBS Group aims to do the same, taking its investment bank staff to 400. BLOOMBERG