UBS, Credit Suisse offer Asia wealth bankers a cut on inflows

UBS Group AG and Credit Suisse Group AG are offering a rare incentive for their wealth bankers in Asia to bring in fresh cash, underscoring the challenges the former Swiss rivals face to ensure stability as they seek to complete a government-orchestrated merger.

Relationship managers at both firms will receive commissions of 15 basis points, or US$0.15 for each US$100 in new client money they can bring in, according to people familiar with the matter, asking not to be identified discussing private information.

That’s more attractive than existing bonuses, which are typically tied to fee-generating assets and not only fixed to inflows, said the people. 

Iqbal Khan, the wealth boss at UBS, has been in Singapore this week to meet with staff and clients, according to the people. Khan, who previously worked at Credit Suisse, has been pushing hard to retain talent and bring back funds to the new combination that may close as soon as this month or in June. Asia, the region with the fastest growing number of wealthy, has been a key battleground for both UBS and Credit Suisse.

It is unclear whether the incentive would be rolled out in other regions, said the people. A spokesman for UBS declined to comment, as did a spokeswoman for Credit Suisse.

UBS agreed to take over Credit Suisse in March in an emergency deal engineered by the Swiss government as concerns grew the troubled bank was hurtling toward bankruptcy amid heavy losses and outflows.

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Adding to outflows last year, Credit Suisse clients pulled 61 billion francs (S$91.2 billion) from the lender in the first quarter, with the bulk exiting in the last weeks of March. UBS likely picked up at least some of those flows as it attracted US$28 billion of net new money in its wealth business in the first quarter.

Credit Suisse’s more than US$1 trillion of client assets were the key appeal for a deal that bolsters UBS’s ambition to be the world’s top wealth manager.

Credit Suisse has also been handing out retention bonuses to staff whom UBS sees as critical for the future of the combined bank. It sent letters in April awarding guaranteed bonuses, made up of cash and UBS shares as well as deferred component, to a small group of senior key employees, people familiar have said earlier.

Other Credit Suisse employees, which include revenue generators such as wealth managers and investment bankers as well as back-office and operational staff important for maintaining platforms and systems, were eligible for an award based on performance, the people said.

Managers at both banks are also battling a brain-drain of top talent at Credit Suisse with private bankers leaving for rivals. Deutsche Bank AG hired several senior wealth executives including Young Jin Yee, Johanes Oeni and Stella Lau. In Spain, five staff including Christian Thams, a 17-year veteran and a managing director, have departed. Such departures generally come with pullouts from clients attached to their relationship managers. BLOOMBERG