Credit Suisse will continue betting on the «one-bank» model with hopes that a renewed cultural focus on risk management could help avoid the same blunders experienced in recent years. Could the hire of Francesco De Ferrari bring back disciplined cross-divisional collaborations?
Credit Suisse's dependency on the «one bank» business has caused hiccups in recent years worldwide with numerous examples including the collapse of family office Archegos, the downfall of Greensill supply chain funds and, in Asia, the Luckin Coffee scandal.
But while it wants to intensify focus on culture across risk management functions and its strategy, it is reluctant to shift away from the «one bank» model that has allowed it to holistically serve clients’ business and family needs across divisions.
Anonymous sources familiar with the matter have noted that the bank is confident that even with a reorganization that has led to less structural autonomy in places like the previously standalone APAC unit, there is a «muscle memory» developed that will likely result in limited slippage, as evidenced by the reorganization of the equities business into the global markets business in 2016.
Focus on Growth in Asia
The return of Francesco De Ferrari as the new global head of wealth management signals that while more decision-making could be centralized in Zurich, a continued focus on growth in Asia will remain.
While the bank will maintain the development of its traditional fee-based business, the Asia focus will likely mean more cross-divisional collaboration especially in light of weaker investor sentiment caused by the recent market downturn in China.
De Ferrari is no stranger to the model having led the APAC private bank from 2011 to 2018, growing revenue and profitability by two and eight-fold, respectively. And he notably left the role before Luckin’s $645 million IPO in May 2019 which was subsequently followed by revelations of inflated sales figures and a crash in its shares.
New Structure, Similar Faces
Interestingly, Credit Suisse’s new organizational structure still contains similar personnel at the top for when cross-divisional decision-making comes into question in Asia.
Although Helman Sitohang is now the CEO of APAC, he has experience working alongside De Ferrari to make such «one-bank» decisions when he was the APAC head of investment banking from 2012 to 2015.
New to the equation is the inclusion of Christian Meissner as the global head of investment banking, alongside his role as CEO of the Americas.
Starting on a (Cultural) Backfoot
While experience and old partners are on the side of De Ferrari, he appears to be starting on the back foot with regards to culture – a key focus in Credit Suisse’s new strategy.
In addition to «rubbing some of Credit Suisse’s 14 directors the wrong way» during a presentation for his own candidacy and a stricter approach to his recruitment with a delayed appointment, De Ferrari left AMP with questions about corporate culture under his watch.
The former AMP CEO left after three years marked by not only crisis management but two sexual harassment scandals involving the hire and eventual resignation of ex-Credit Suisse executive Alex Wade and the promotion of Boe Pahari as AMP Capital CEO.
