Credit Suisse gets a green light to expand in China
Last year, Credit Suisse faced delays in obtaining regulatory approvals for some of its China operations.
The backstory: Swiss bank Credit Suisse decided to focus on wealth management in Asia with a major reorganization by former CEO Tidjane Thiam in 2015. But, the European lender has been struggling with a series of scandals that led to huge losses and a review of its banking practices. This resulted in job cuts and a reduction in its China workforce.
More recently: Last year, Credit Suisse faced delays in obtaining regulatory approvals for some of its China operations following the departure of senior management personnel. But, after experiencing gnarly global wealth management outflows of 92.7 billion Swiss francs (US$98.29 billion) in the fourth quarter last year, Credit Suisse is ready to make a splash in the massive 27 trillion yuan market (around US$3.9 trillion.)
The development: According to an internal memo, the bank is gearing up to launch its wealth management business in China by the first half of this year. Credit Suisse added an investment consultancy license to its arsenal, which gives the firm the power to create and distribute equity research products onshore and offer investment advice to clients. Plus, it got the green light to serve clients all over China with approvals for proprietary trading and an expansion of its brokerage license.
Credit Suisse is also doubling the number of relationship managers in China this year to make sure it's ready to hit the ground running. This is quite the turnaround from the layoffs that went down last November as part of a global overhaul.
"This is a milestone for Credit Suisse's China plans as we move towards the future launch of our wealth management services in one of the fastest growing wealth markets globally," said Edwin Low, CEO for Asia Pacific and Janice Hu, CEO for China, said in the memo.
By "2024 I think we should be profitable," said Credit Suisse's new CEO Ulrich Koerner in an interview with Bloomberg Television's Francine Lacqua in February. "2023 will be a transformative year, and then we get better and better."
"We are pleased to have received these licenses as it marks a key milestone in offering wealth management services onshore in China, which is the fastest growing wealth market in the world," said Edwin Low, APAC CEO of Credit Suisse, to Reuters in an email statement.
"The banking sector has been responding to global rate hikes with higher rates and Credit Suisse is fully focused on providing our clients with differentiated advice and competitive solutions," said a spokesperson in an emailed statement.