Credit Suisse Group is shifting resources in the pursuit of business from a broader range of rich clients, as the lender focuses more on wealth management amid cuts to its troubled investment bank.
The Zurich-based bank is reassigning advisors to its Private Banking International unit, led by Raffael Gasser, according to a memo sent to staff Tuesday and seen by Bloomberg. The aim is to expand coverage of global high-net-worth clients in addition to the ultrawealthy segment, the bank said.
As many as a third of the relationship managers working in wealth management in Switzerland who don't currently sit under PBI will be reassigned to the business, a person familiar with the matter said. In practice, the move reduces the emphasis on regional business areas by concentrating managers serving high- net-worth clients in that one unit.
After multiple quarters of poor results and turmoil, new Credit Suisse CEO Ulrich Koerner is working on the second strategy revamp within a year and taking tougher action with the loss-making investment bank. While the lender has signaled an intensified focus on wealth management since last year, the strategy overhaul further adds to the pressure on new wealth head Francesco de Ferrari to improve performance at the business.
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In June, Credit Suisse said that it will focus on extending its high-net-worth coverage model to Hong Kong and Singapore. Given the larger client base and revenue pool compared to the ultra-high-net-worth segment, which typically refers to clients with at least $30 million in assets, the bank also said it was aiming to boost recurring revenue from the larger market for those with liquid assets over $1 million.
A stronger focus on global wealth management beyond the billionaire ranks at Credit Suisse makes the strategy reminiscent of Zurich rival UBS Group. There, Chief Executive Ralph Hamers has also been pushing into the lower rungs of wealth with the acquisition of the U.S. robo advisor Wealthfront and the restructuring of the bank's Global Family Office unit.
Credit Suisse has hired Dixit Joshi, former Deutsche Bank AG treasurer as chief final officer, and elevated Francesca McDonagh to operating chief, in the first big leadership reshuffle under Koerner. In November, Credit Suisse outlined a groupwide strategy consisting of shrinking the investment bank and shifting about $3 billion of capital to the wealth management unit.
McDonagh, the outgoing CEO of Bank of Ireland Group Plc, was originally hired this year to oversee the Europe, Middle East and Africa region when she joins in September. That role will now fall to de Ferrari, who has run the region in the interim.
Credit Suisse said it will provide a restructuring plan for the investment bank by this November, when it reports third-quarter results. One option being discussed is that the investment bank may cease to exist as a separate unit, Bloomberg reported this week.
