Jobs within private banking and investment banking are looking decidedly more secure than those in trading at Credit Suisse in Asia Pacific.
Traders work in Credit Suisse’s ‘markets’ unit within its stand-alone Asia Pacific division, and markets made a pre-tax loss of CHF28m in 2017, compared with a profit of CHF275m the previous year, according to Credit Suisse’s full-year results.
Credit Suisse cut jobs from its APAC equities team last year and its results help to explain why. Equity sales and trading revenue in the region fell by 21% between 2016 and 2017 to CHF920m. This was partly driven by “a difficult trading environment that was characterized by persistently low levels of volatility and reduced client activity in equity derivatives”.
Last year was even worse for people working in fixed income. Their revenue dropped 51% compared with 2016 – from CHF531m to CHF262m. The bank blamed this on “decreased client activity in rates and lower revenues in foreign exchange products due to weaker trading performance”. However, Credit Suisse notes that its markets business has enjoyed a good start to this year – with net revenues for the first six weeks of 2018 up more than 15% compared with the same period last year.
Meanwhile, ‘wealth management and connected’ (WM&C) – Credit Suisse’s largest APAC department, which contains both its dominant private banking unit and its advisory, underwriting and financing operations – posted a full-year adjusted pre-tax income of CHF820m, a rise of 63% on 2016.
By comparison, it was a good year to be an investment banker at Credit Suisse – advisory, underwriting and financing revenues were up 25% to CHF715m. An end-of-year spike in “financing activities and equity underwriting” helped the WM&C division to post record fourth-quarter revenues. Credit Suisse came first for APAC (ex-Japan) investment banking revenue by bank in 2017, according to Dealogic.
Less promisingly, the number of relationship managers within Credit Suisse’s APAC private bank fell from 650 to 590 year on year, but revenues in their unit rose by 17% to reach CHF1,607m.
The average RM at Credit Suisse in APAC now manages CHF333m in assets, compared with CHF260m in 2016 – an increase of about 28%. This will likely see Credit Suisse place higher when 2017 RM productivity rankings (AUM divided by headcount) are published later this year. The Swiss firm took the 11th slot for 2016, behind its main rival UBS.
“We have continued to hire senior RMs strategically across the region, while managing performance at the same time. As a result, RM productivity continues to increase robustly,” says a Singapore-based spokesperson for the bank. Credit Suisse has been weeding out underperforming RMs over the past year, adds a private banking headhunter.
The firm’s productivity drive appears to be paying off. Assets under management jumped CHF29.9bn to CHF196.8bn in the 12 months to end 2017. Net new assets, a key performance indicator in private banking, rose to CHF16.9bn in 2017, up 24% year on year.
These figures also suggest that some of the RMs recruited during Credit Suisse’s recent hiring spree – it took on 100 RMs in the year to end-June 2016 – are starting to bring in more assets and become more productive.
Credit Suisse’s headcount across both markets and WM&C in APAC increased from 6,980 to 7,230 year on year. This was largely fuelled by hiring in technology and operations, says a recruiter in Singapore. Last year, for example, the bank doubled the size of its ‘solutions’ technology team in Asia.
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