Credit Suisse will reportedly ax half of the staff at its investment banking unit in mainland China which is undergoing a major overhaul following the installation of new management.
The arrival of veteran Credit Suisse investment banker Janice Hu to replace Gao Li from Founder Securities as the head of Credit Suisse’s majority-owned securities joint venture marked a turning point for the business, according to a «Caixin» report citing unnamed sources.
The joint venture registered a 41.8 million yuan ($6 million) loss in 2019 compared to a 35.5 million yuan ($5.1 million) loss in 2018. The report attributed part of the struggles to regulatory restrictions against the joint venture and financial problems marring the parent of Founder Securities, Peking University Founder Group Corp.
Earlier this week, Credit Suisse’s Asia Pacific chief executive Helman Sitohang said the bank was seeking full ownership of the mainland securities joint venture, Credit Suisse Founder Securities (CSFS).
Reshuffling Staff
As of 2019-end, CSFS housed 154 employees including 85 within the investment banking division. Under the new plans, half of the investment banking staff will be let go and Credit Suisse will «probably parachute in staff from its Hong Kong operations to fill some of the vacancies», the report added. Following ownership changes, CSFS is also expected to be named Credit Suisse Securities.
A spokesperson declined to comment on the issue, instead referring to the aforementioned comments by Sitohang which underlined plans for tactical hiring and further integration between the mainland and other operations offshore in the region.
In April, Credit Suisse obtained a majority stake in CSFS, making it the sixth foreign investment bank to gain majority ownership in a mainland securities joint venture, joining global rivals UBS J.P. Morgan, Nomura, Morgan Stanley and Goldman Sachs.
