4 minutes, by Read (Reuters) – Zurich (Reuters) – Three sources said Credit Suisse is considering centralizing the administration of its bankers to the world’s wealthiest, replacing a regional structure, as part of efforts to speed up a revamp following a series of scandals. PHOTO FROM THE FILE: Credit Suisse’s logo is shown at a branch office in Bern, Switzerland, on October 28, 2020. REUTERS/File Photo/Arnd Wiegmann After meeting in the mountain resort of Bad Ragaz in October, the Swiss bank and its board are expected to settle on a new strategy as soon as October, according to two sources familiar with senior executives’ thinking. The most valuable section of Credit Suisse is being reimagined, with management mulling merging the private banking sector and other services that manage money for the world’s wealthy into one worldwide division, according to three sources who spoke to Reuters. A regionalised structure adopted in 2015 would be scrapped by targeting client managers who deal with the bank’s wealthiest clients, many of whom are worth tens of millions of dollars. Local managers in Asia and around the world, who traditionally had a lot of autonomy, would be brought under rigorous Swiss management, making it easier to slash costs. Credit Suisse did not respond to a request for comment. In 2018, UBS, a larger Swiss competitor, streamlined its global wealth management organization by integrating its businesses serving American and international clients into one global division, allowing it to cut expenses. Credit Suisse executives and board members met for an annual strategy meeting in Bad Ragaz, which is noted for its spas and thermal baths. The executives are concerned that Switzerland’s second-largest bank, which has been plagued by two scandals this year, may face break-up calls from investors or that its declining stock market value may make it a target for foreign takeovers. Three sources also told Reuters last week that a domestic merger with UBS, which has been explored in the past, is seen as a more palatable alternative. Managers at Bad Ragaz did not formally discuss mergers, with the possibility of a tie-up being “the elephant in the room,” according to one source following the meeting. Credit Suisse is overhauling operations and priming its businesses to insulate itself from investor pressure under the leadership of new chairman Antonio Horta-Osorio. Credit Suisse might be able to streamline products while also becoming more attractive to a possible merger partner by integrating its wealth management divisions, according to one source. Two individuals stated that a global company could operate better with the investment bank, which provides financial services to entrepreneurs and ultra-wealthy families. According to the sources, a combined unit may have new leadership, and Horta-Osorio was driving crucial choices on the bank’s reorganization and management. According to one source, an unified wealth management unit might combine the Asia-Pacific and International Wealth Management divisions, or fold in the bank’s private banking business for ultra-wealthy customers in its home market, which is currently housed in its Swiss division. Credit Suisse lost more than $5 billion in the rush to unwind investments by family office Archegos, and it is facing legal action for advising clients to invest $10 billion in bonds issued by Greensill Capital, which has since collapsed. Oliver Hirt in Zurich and Pamela Barbaglia in London contributed reporting; Brenna Hughes Neghaiwi wrote the story; and Alexander Smith edited it. Continue reading
