Credit Suisse’s private bankers are managing more money in Asia, even as the firm’s headcount of relationship managers dips.
The number of RMs employed by Credit Suisse in Asia Pacific fell 9% – from 650 to 590 – year on year in the third quarter, according to its Q3 financial results. The bank’s 2015 soft target of having roughly 800 RMs in Asia by 2018 is no longer part of its strategy for the region.
Meanwhile, assets under management within APAC private banking (a unit of the firm’s regional ‘wealth management and connected’ business) went from CHF168bn to a record CHF190bn, a rise of 13.1%, over the same period. This was “driven by higher levels of divisional collaboration and broader activities with clients, with particularly robust levels of asset referrals from ultra-high-net worth entrepreneurs”.
The focus on UHNW clients, who are smaller in number than their less affluent high-net-worth counterparts, gave Credit Suisse scope to slightly reduce the number of RMs it needs, says Rahul Sen, a former Merrill Lynch private banker, now head of wealth management at search firm The Omerta Group.
Credit Suisse continues to "strategically" hire "quality" senior bankers as it aims to become the "entrepreneurs' bank" in Asia, says a Singapore-based spokesperson.
If you are a current RM at Credit Suisse, you are probably managing more assets than you were a year ago. Average AUM per banker is now CHF322m, compared with CHF258.4m in Q3 2016 – an increase of about 25%.
This will likely see Credit Suisse place higher when 2017 RM productivity rankings (AUM divided by headcount) are published early next year. The Swiss firm took the 11th slot for 2016, behind its main rival UBS.
The per-head AUM increase bodes well for bonuses, too. Although Credit Suisse (like UBS) tends to pay lower bonus percentages than boutique firms do, healthy revenues help to compensate for the lower ratio.
Net new assets under management, a key performance indicator in private banking, are also heading in the right direction. They grew by 13% on an annualised basis in Q3, up from 10.9% a year previously.
These figures also suggest that some of the RMs recruited during Credit Suisse’s hiring spree last year – it took on 100 RMs in the year to end-June 2016 – are starting to bring in more assets and become more productive.
Total net revenues in APAC 'wealth management and connected' stood at CHF548m in Q3, up 14% year on year (and within that private banking revenues rose 16% to CHF400m).
By contrast, ‘markets’ – the other business within Credit Suisse’s Asia Pacific division – fared less well, with revenues dropping 22% to CHF342m. This was mainly due to lower fixed-income and equity sales and trading revenues, helping to explain why Credit Suisse has cut jobs from its Asian equities team this year.
For our global analysis of Credit Suisse’s investment banking results, click here.
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