The Swiss bank and its board are looking to decide on a new strategy as early as October after meeting in the mountain town of Bad Ragaz, two sources close to the senior executives’ thought said.
Reimagining the most prized part of Credit Suisse illustrates just how far-reaching this overhaul is likely to be, with executives discussing bundling private banking and other money management services for the world’s rich into one. only global division, the three sources told Reuters.
Targeting client managers who deal with its wealthiest clients, many of whom are worth tens of millions of dollars, would do away with a regionalised structure introduced in 2015.
Such a change would overwhelm local managers in Asia and internationally, who have enjoyed considerable autonomy, under tight Swiss control, while facilitating cost reduction.
Credit Suisse declined to comment.
Its biggest Swiss rival UBS adopted a unified global wealth management structure by combining its activities serving US and international clients into a global division in 2018, which enabled it to reduce costs.
Credit Suisse executives and board members recently gathered in Bad Ragaz, best known for its spas and thermal baths, for an annual strategy meeting.
Executives fear that Switzerland’s second-largest bank, which has been hit by two scandals this year, will face break-up calls from investors, or that its falling market value will make it a target for foreign takeovers.
A nationwide merger with UBS, something that has been discussed in the past, is seen as a more acceptable option, three sources also told Reuters last week.
The leaders did not formally mention the mergers in Bad Ragaz, with the possibility of a rapprochement “the elephant in the room”, said a source after the meeting.
Under the leadership of its new chairman Antonio Horta-Osorio, Credit Suisse is looking to review its operations and prepare its activities to protect it from investor pressure.
By combining its wealth management business, Credit Suisse would be able to streamline its products, while becoming more attractive to a potential merger partner, a source said.
A global entity could also work better with the investment bank, which provides financial services to entrepreneurs and ultra-rich families, two of the sources said.
A combined unit could gain new leadership, the sources said, adding that Horta-Osorio was behind the key decisions regarding the bank’s overhaul and its management.
A merged wealth management unit could either combine the Asia-Pacific and International Wealth Management divisions, or fall back further on the bank’s private banking activities for ultra-wealthy clients in its home market, which is now in its core business. Swiss division, a source said.
Credit Suisse has lost more than $ 5 billion in the rush to unwind transactions in family office Archegos and faces lawsuits for helping clients invest $ 10 billion in bonds issued by the finance company of Greensill Capital’s collapsed supply chain.
(Reporting by Oliver Hirt in Zurich and Pamela Barbaglia in London; Writing by Brenna Hughes Neghaiwi; Editing by Alexander Smith)
By Oliver Hirt and Pamela Barbaglia