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Credit Suisse powers up wealth arm and axes prime broking

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Swiss-headquartered Credit Suisse announced yesterday (4 November) it will shift CHF3bn (€2.84bn) of capital to its wealth management division, as well as increase the ratio of capital allocated to the wealth, Swiss bank and asset management operations compared to its investment banking arm.

The move is aimed at simplifying its structure into four divisions: its Swiss bank, a global investment bank, asset management and the new global wealth management division.

Its prime brokerage business saw $5.5bn in losses when investment fund Archegos Capital Management defaulted in March.

We will become a more streamlined bank, with expected lower volatility of earnings and with a sharper focus on the markets we operate in.”

The Swiss banking giant plans to hire 500 more private bankers over the next three years, with the aim of having 1.1 trillion francs of assets under management by 2024 compared with 0.9 trillion now.

Thomas Gottstein, group chief executive at Credit Suisse, said: “With this strategic review, we have determined a clear and compelling way forward, building on existing strengths and accelerating growth in key strategic business areas.

“We will become a more streamlined bank, with expected lower volatility of earnings and with a sharper focus on the markets we operate in.

“We have the ambition to further strengthen our position as a global leader in wealth management and we will make further investments in areas where we have competitive advantages within our more focused and more capital-light investment bank, our leading and client-centric bank in Switzerland as well as our multi-specialist asset manager.

“I am confident that with the measures we announced today, we will be better positioned to leverage our strengths, control our risks and further build connectivity with the wealth management division, bringing the whole of our bank to all our private, corporate and institutional clients around the world.”