Credit Suisse Group AG is considering to centralize the management of its bankers to the world’s wealthy, reversing a regional structure put in place six years ago, as the scandal-plagued Swiss bank looks for ways to tighten controls and improve operations.
The bank’s wealth management business is split into three separate divisions such as the international business, Swiss business and a separate Asia-Pacific unit. Some executives feel that this separation had not worked well and they think that combining the businesses into one group would offer more benefits. By doing so, Credit Suisse would reel in local managers in Asia and internationally, who have enjoyed considerable autonomy, putting them under tighter Swiss control as well as making it easier to cut costs.
It would be able to streamline products, while also becoming more attractive to a potential merger partner. With the investment bank, a global entity could work better. Credit Suisse declined to give comment on this. The discussions within Credit Suisse came after the bank suffered scandals. Those includes its ties to collapsed supply chain finance company Greensill Capital and losses from family office Archegos. This crisis hammered the bank ‘s share price. Some executives worried and stated that the bank could be vulnerable to unwanted pressure from activist investors to change the strategy.
Antonio Horta-Osorio, the bank’s new chairman, kicked off a strategic review in May. Spinning off its local Swiss bank to prepare the rest of the business for a merger, pruning back investment banking or selling its asset management business are among the options. After an annual strategy meeting in the mountain town of Bad Ragaz in October, the Swiss bank and its board are looking to decide on a fresh strategy. A merged wealth management unit could either combine the Asia-Pacific and International Wealth Management divisions, or further fold in the bank ‘s private banking business for ultra-wealthy customers in its home market. A combined unit may get new leadership. And that the key decisions are driven by the Horta-Osorio. The model would follow a strategy taken by UBS Group AG. One of the options that Credit Suisse executives have discussed in the past is a merger with UBS. In Bad Ragaz, executives did not formally discuss mergers, but the possibility of a tie-up was the main piece in the cake.