After years of success capitalizing on Asia’s booming growth and autonomous management in the region, Credit Suisse is due to present a strategy update that is widely expected to include a sweeping overhaul with more centralization and less local decision-making in the region.
Credit Suisse has much to prove in today’s upcoming strategy update after a series of major setbacks worldwide.
While the media spotlight has been placed on the U.S.-based downfall of Archegos and the collapse of U.K.-based Greensill-linked supply chain funds, Asia is very much a key area of focus as the only region structured to house both a private and investment bank under one roof.
A key beneficiary of collaboration between the two businesses via so-called «one bank» deals, the region has also suffered its own setbacks from the structure, most notably a default from the accounting scandal of China's Luckin Coffee whose founder Lu Zhengyao was once called the «poster child» and «dream client» for the Swiss bank.
Wealth Management
The outlook for the future of «one bank» business in the region is uncertain due to major mergers involving the APAC unit including the private bank – a key engine of client acquisition.
Credit Suisse’s board recently approved a plan to create a single global private bank – combining the wealth units of Asia and Switzerland alongside Europe, Middle East and Africa – sources familiar with the matter told finews.asia, which is expected to be disclosed later today.
With ex-Asia wealth head Francesco De Ferrari being tipped as the top candidate to lead the global private bank, this points to signs of continued focus on the region’s riches while centralizing management in Zurich.
Investment Banking
The Asia investment bank is also the sole single-region investment banking business not managed centrally.
After merging the Asia investment bank's markets business with the global unit last year, Credit Suisse is reportedly considering more consolidation by also folding in the region’s advisory business.
Future of «One Bank»
A self-proclaimed «bank for entrepreneurs», Credit Suisse's openness to collaborative business coupled with swift, on-the-ground decision-making was a key advantage to attracting new clients and talent, especially in Asia.
But under the potential new structure – as well as a global focus on changing culture – it appears unlikely that Credit Suisse will undergo acceleration in «one bank» dealmaking or an increase in risk appetite for such business.
Future success in Asia will depend less on the effective co-dependency of businesses in the region and more on the independent strength of each one.
