The latest strategic review conducted at Credit Suisse will not have an impact on the bank’s pension scheme under the Pensionskasse, IPE understands.
Credit Suisse will reorganise into four divisions – wealth management, investment bank, Swiss bank and asset management – and four geographic regions including Switzerland, Europe, Middle East and Africa (EMEA), Asia-Pacific (APAC) and Americas, with the aim to grow sustainably while underlying the importance of risk management.
The group has a portfolio of third-party relationships in its asset management division that will gradually shrink to free up capital in the business, as the profitability of the partnership may be relatively volatile, sources said.
Credit Suisse is looking for returns in the asset management business of over 45% on regulatory capital and net asset growth of 4% per year, it announced. The asset management and the Swiss bank divisions, however, will undergo smaller changes compared to other businesses.
One of the most important shifts resulting from the new strategy is the investment bank division exiting the prime brokerage industry with the exception of Index Access and APAC Delta One, leading to a capital reduction of over $3bn (€2.6bn).
This means that hedge funds will have to look for another prime broker. Credit Suisse has signed a referral agreement with BNP Paribas to potentially migrate prime services and derivatives clearing customers to an alternative providers, even though clients will ultimately decide whether to leave the Swiss bank.
Freed-up capital of CHF3bn (€2.8bn) from other divisions will be redeployed to the wealth management unit, which targets a client business growth volume close to CHF1.6trn, assets under management close to CHF1.1trn, and incremental recurring revenues of over CHF1bn by 2024, the bank said.
The different parts of the wealth management division will be consolidated under one roof.
The new chair at Credit Suisse, António Horta-Osório, is trying to change the strategic direction of bank following the Greensill and Archegos Capital Management fallouts. The collapse of Archegos has resulted in losses of $300m in revenues for the bank, according to reports.
Announcing the new strategy, Horta-Osório said: “Risk management will be at the core of our actions, helping to foster a culture that reinforces the importance of accountability and responsibility.”