Credit Suisse expects to take good advantage of the set-up it has put in place as one of the region’s most dynamic private banks, despite the choppy waters engulfing equity markets.
Helman Sitohang, the chief executive officer of Credit Suisse in Asia Pacific, struck a very upbeat note when he explained the regional figures: «It has been an exciting first half for us and a very good start,» he told the media on Tuesday.
Pretax profit in the second quarter after all rose by one-third in the second quarter compared with a year ago, the return on capital increased by 6 percentage points to 20 percent and assets under management broke through the 200 billion Swiss francs barrier for the first time, reaching 206 billion ($209 billion) by the end of June.
Troubled Political Times
And yet, the bank’s bosses in Zurich used the word «solid» when they described the figures for Asia. The main reason behind this were what Sitohang called «choppy market conditions» that affected the equity markets mainly in China and «selective deleveraging» by clients in that market.
With China and Donald Trump’s U.S. heading for more trouble over trade tariffs, the current volatility may yet continue for a while. However, Sitohang sees «more upside in the long run» in the region, which in terms of wealth growth is the world’s most dynamic, growth that the Swiss bank is eager to capture. «We are very happy with our franchise growth and the 200 billion francs were a very important milestone for assets under management,» said Sitohang.
Strong Economic Conditions
In his guidance for the second half of 2018, Sitohang said that he wasn’t sure whether the bank would be able to emulate the very strong performance on initial public offerings of the same period last year. Though the bank has a number of strong candidates in the pipeline, it depended on many factors whether the plans would actually be followed through, he noted.
In general, Credit Suisse estimates that economic growth is still quite strong despite the political difficulties that started with the election of U.S. President Trump. With that optimism about underlying business conditions, Sitohang expects that clients will turn to the bank looking for new investment opportunities.
Some Time to Compete
Credit Suisse didn’t have any news on when it would be able to increase its stake in the Chinese joint venture to 51 percent from a current third. The application of the bank had to go through a certain regulatory process that, Sitohang said, would be taking some time to complete.
