More evidence that Credit Suisse is getting more out of its private bankers in Asia: the bank now says its APAC ‘wealth management and connected’ (WM&C) unit, of which private banking is the major revenue generator, is on track to meet its 2018 income target a year in advance.
Credit Suisse announced at its investor day on Thursday that WM&C income in 2017 would come to about CHF0.7bn this year, the same figure that it had originally forecast for 2018. Its income goal for next year has also been upped to CHF0.85bn, as shown below in a chart from the bank’s investor presentation.
As we reported in early November, total net revenues for WM&C in APAC were up 14% year on year (and within that private banking revenues rose 16%). But the number of RMs employed by Credit Suisse in the region fell 9% – from 650 to 590 – over the same period. Average AUM per banker is now CHF322m, compared with CHF258.4m in Q3 2016 – an increase of about 25%. In short, Credit Suisse private bankers are getting more productive.
To meet the revised 2018 income target, however, Credit Suisse will need to increase its RM headcount, especially in the private banking hubs of Singapore and Hong Kong, says Rahul Sen, a former Merrill Lynch private banker, now head of wealth management at search firm The Omerta Group. “The bank’s existing RMs will, of course, grow their books organically, but there has to be hiring as well,” he adds.
Credit Suisse is unlikely to hire as aggressively as when it took on 100 RMs in the year to end-June 2016. “It will hire more quietly next year. The focus will be quality over quantity – good senior bankers from VP to MD, who current manage at least $200m,” says Sen. “I don’t think there’s much space left for pure managers, unless they bring teams of at least 10 RMs with them.”
“The bank will attract RMs who need to have the CS brand behind them. For example, bankers whose clients need the kind of investment banking products that CS has been successfully selling to entrepreneurial private clients in Asia,” adds Sen.
Credit Suisse continues to pursue its strategy of being the “entrepreneurs’ bank” in Asia, a focus it reiterated during the investor day.
Source: Credit Suisse
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