Credit Suisse’s headcount of Asia-based private bankers fell to 610 in the second quarter, down 10 compared to Q1 and 40 year-on-year, belying its stated aim of boosting headcount.
The decline, revealed in its second quarter results, raises questions about whether the bank can now achieve its target, announced by CEO Tidjane Thiam in 2015, of having 800 RMs in APAC by the end of next year.
This would now require Credit Suisse to recruit 190 RMs in Asia in just 18 months, a tall order in a talent short job market. Rivals such as UBS, Julius Baer, Standard Chartered, DBS and Bank of Singapore are all expanding in Asian wealth management.
Credit Suisse had also been recruiting aggressively until recently – it took on 100 RMs in the year to end-June 2016. “It hired extensively in 2015 and 2016, so it’s now letting go of bankers who’ve not performed,” says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group. “Banks normally give RMs 12 to 18 months to start showing results in terms of new assets and revenue.”
“CS has also been quite rigid in its market purity, so RMs who have multi-jurisdictional clients may prefer banks which offer them more flexibility to have clients across markets. CS has lost bankers because of this,” he adds.
Credit Suisse’s cull of underperformers may have blunted its recruitment drive, but it appears to have boosted productivity. While Asian RM headcount has been shrinking, the firm is managing more assets across the region and average AUM per banker is up 20% year on year.
In Q2, its 610 RMs looked after assets of CHF177.8bn (or CHF291m per banker), compared to CHF157.6bn (CHF242m per head) 12 months previously. Revenues in Asian private banking (part of the ‘wealth management & connected’ business) increased from CHF455 to CHF559 over the same period.
Private bankers at Credit Suisse in Asia also enjoyed a much better second quarter that their counterparts in the firm’s loss-making regional ‘markets’ unit.
Compared to Q2 2016, net revenues were down 37%, due to lower equity and fixed income sales and trading revenues. Equity sales and trading income fell 40%, partly because of “lower revenues from equity derivatives reflecting lower client activity and lower market volatility”.
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.
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