CS wants to strengthen wealth management and Swiss business

Credit Suisse aims to strengthen global wealth management and Swiss business as part of its latest strategy review. In addition, the cost base is to be significantly reduced again.

basic information at a glance

  • According to a statement by CS on Wednesday, the main focus is on expanding its position in wealth management and in the Swiss universal bank.

Together with Asset Management, they formed the bank’s roots.

The strategy has been slightly revised last year. Due to the changed economic and market environment, alternatives are now needed that go beyond the results of last year’s review, Credit Suisse justifies this step.

The review also aims to further reduce the cost base significantly. According to their own information, after the first half of the year it was extrapolated and adjusted for the full year at 16.8 billion francs, with a target value of 16.5 to 17.0 billion. From this value, the costs are to be reduced to below 15.5 billion, which would correspond to a cost reduction of 1 to 1.5 billion Swiss francs.

On an unadjusted basis, CS even had expenses of over $ 19 billion in 2021. The bank declined to comment on what today’s announcement for staff cuts means. However, there are already speculations in the media that several thousand jobs will be lost.

CS only wants to announce details of a possible reduction and strategy review along with third-quarter business data scheduled for October 27. First of all, the planned basic functions were mentioned today.

Consequently, in terms of wealth management, CS aims to expand its position in Switzerland, the Europe and Middle East region, the Americas region and the Asia-Pacific region. The goal is to take advantage of the strengths of the ultra-rich segment while also accelerating growth with other affluent customers and thus increase recurring income. For this purpose, a unified global platform is to be created. CS also intends to accelerate its digital business (CSX offer) in the area of ​​Swiss banking activities.

The strategy review must essentially ensure that the investment bank has a less capital-intensive, advisory-driven banking department and a more focused markets department, according to the board of directors and senior management, as announced. This would complement the development of the wealth management business and Swiss Bank, and the strategic goals could be better achieved.

For an investment bank that has long been part of Credit Suisse’s DNA, this represents a “fundamental transformation,” writes CS. As part of this, the options for the area of ​​securitized products should also be explored. In this area, which includes securitization of securities, CS is in a strong position for historical reasons. This applies, for example, to mortgage-backed securities that are secured by home loans and other real estate loans.

As announced today, CS is looking for external capital for this “highly profitable” but capital intensive area and intends to free up resources for growth areas. According to CS, the division currently has about $ 20 billion in risk-weighted assets and about $ 75 billion in leveraged exposure. The company offers “significant, previously untapped growth opportunities that could be optimally exploited by sourcing outside capital,” says the bank.

In this context, apart from the change from Thomas Gottstein to Ulrich Körner, there are also other personnel decisions. David Miller and Michael Ebert have been appointed Co-Heads of Banking and Markets respectively. Meanwhile, the CEO of the investment bank, Christian Meissner, will focus on the ongoing strategic transformation.

The Board of Directors also established an ad hoc committee – the Investment Bank Strategy Committee – to monitor and implement the new strategy. It is led by Michael Klein, the other members are Mirko Bianchi, Richard Meddings and Blythe Masters.

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