Credit Suisse is in the market for hundreds of new private bankers in Asia-Pacific, but public proclamations of expansion don't always go to plan, and their recruitment drive has stalled, according to the bank’s quarterly results.
The Swiss bank's aggressive recruitment in Asian private banking – it took on 100 RMs in the year to end-June 2016 – has temporarily ground to a halt. It now needs to recruit 180 private bankers to meet its target, announced by CEO Tidjane Thiam in 2015, of having 800 RMs in APAC by the end of next year.
Revenues Credit Suise's APAC wealth management business increased by 44%, from CHF408m ($410m) to CHF589 ($592m). Regional assets under management grew 18.8% to CHF177.4bn ($178.4bn).
Credit Suisse is looking after these assets, however, with the same amount of relationship managers (620) than it was a year ago. And APAC RM headcount actually fell compared with Q4, when the bank employed 640.
Asian RMs are being well rewarded at Credit Suisse. They are managing more assets per head than 12 months ago, and compensation and benefits in their unit have increased 27% year on year, primarily driven by higher salaries.
Private bankers at Credit Suisse in the region still enjoyed a better first quarter that their counterparts in the firm’s regional ‘markets’ unit (namely, the sales and trading business of its investment bank). Revenues in APAC markets have tumbled, raising the prospect of further job cuts.
Compared to Q1 2016, net revenues in markets decreased 41% – from CHF499m ($501m) to CHF292 ($293m) – mainly due to lower fixed income and equity sales and trading revenues. Credit Suisse’s markets revenues failed to cover costs in Q1 – it made a CHF$54m ($54bn) loss.
These numbers help explain why Credit Suisse has already trimmed its Asian equities team this year. It reportedly axed at least half a dozen equities jobs in March, including Matt Pecot, head of prime services for Asia Pacific, and Jamie White, a sales-trading director in Hong Kong. Thiam said today during the Q1 results analyst call that Credit Suisse would continue to "right size" its Asian equities business.
“Like all banks in Asia, Credit Suisse is constantly reviewing the size of its sales and trading team,” says a Hong Kong headhunter.
Over the past 18 months, equities roles have disappeared at several banks in Asia, including Standard Chartered, Barclays, Deutsche Bank, BNP Paribas, CLSA, Nomura, CIMB and Jefferies.
Banks have been impacted by an ongoing shift from high-touch to low-touch trading, greater movement of fund flows from active to passive managers, and growing competition from major Chinese brokerages.
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