Credit Suisse Group AG is reviewing long-term plans for its mainland China operations as part of a broader overhaul of its strategy after the lender posted billions of dollars in losses, Bloomberg reports.
New chief executive Ulrich Koerner and Asia-Pacific head Edwin Low are among the top bankers who will meet in Singapore next week to discuss issues including their view of the China business, according to people familiar with the matter. theme. Senior Credit Suisse executives have expressed doubts about the benefits of growing its existing securities business and expanding wealth management into the country, the people said, asking not to be identified because the discussions are private.
Any scaling back of Credit Suisse’s ambitions in the world’s second-largest economy would be a dramatic reversal, two years after it won approval to take control of its local business as part of Beijing’s much-publicized opening to outside financial firms. The exodus of senior executives at the securities business, in part a sign of the company’s broader problems, has delayed regulatory approval that would have allowed the growth of stock trading and wealth offerings.
Top executives plan to consider whether to scale back their China operations, even after hiring new staff and making big investments, the people said. Managers in Asia are arguing to executives in Zurich that China is still a place to invest, one of the people said. The consultations are part of its second company-wide strategy review in as many years, due to be unveiled alongside third-quarter earnings. The bank also plans to cut its investment bank after a string of losses.
“Asia Pacific is an important growth market for Credit Suisse and we are committed to investing in the region,” said a Credit Suisse spokesperson. “This includes China, where we remain committed to our long-term ambitions. As part of our strategy, we continue to invest in our footprint in China, including our immediate focus on taking full ownership of our securities joint venture, as we have stated previously. We will update on the progress of our overall strategic review when we report our third quarter results, but any reference to potential results prior to that is purely speculative.”
China’s securities regulator has told the bank to fix high staff turnover before it can roll out its planned new business in the country. Credit Suisse has in recent months lost almost half of its senior management staff at its Chinese securities business, including chief financial officer Annie Qiu, chief compliance officer Xu Yang and chief information officer Larry Tung.
The bank’s previous strategy review in November included a strong “pivot to APAC”, signaling an intention to pursue wealthy clients in mainland China, Hong Kong and Singapore. Contenders to the top of the world’s wealth managers have no choice but to focus on Asia, where the market for serving newly minted billionaires is relatively new. While most have targeted financial centres, Credit Suisse has unveiled ambitious plans for the mainland, including the launch of a local bank that will give it the branch network to power its wealth business.
Global banks are reassessing their outlook in China, where executives have been shaken by a wave of regulatory tightening, escalating friction with the US and the fallout from the strict Covid-zero policy. In addition to Credit Suisse, other banks such as JPMorgan Chase & Co. and UBS Group AG, have recently moved senior executives to China.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
