Credit Suisse reveals plans to expand in Asia

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At a time when many of its banking rivals have been exiting overseas markets in an effort to reduce expenses, Switzerland’s Credit Suisse says it is looking to expand in China and Australia.

The second-largest bank in Switzerland revealed its plans to add RMs [relationship managers] and to “extend Credit Suisse’s capabilities in markets such as China and Australia” on Tuesday, in its regular first-quarter earnings report.

It was planning this Asia Pacific market expansion, the bank said, at the same time it was “consolidating division-wide financing capabilities” in that market, “to provide tailored solutions to our clients [in the region], as there is strong, quality demand for financing solutions”.

In a statement accompanying its results, the bank added: “Going forward, we will maintain our focus on our top client franchises and enhance our capabilities to capture opportunities from increasing wealth creation, growing financing needs, and the deepening of equity markets across Asia Pacific.”

The bank said it had hired an additional 40 relationship managers in the region during the three-month period to the end of March, the same as it had hired in the fourth quarter of 2015. This left it with 630 such individuals at the end of March, compared with 530 at the same point a year earlier.

The news of Credit Suisse’s ambitions in Asia Pacific comes less than a month after the Financial Times reported it had hired away from Swiss rival UBS “at least a dozen wealth managers” in Mexico, as the global competition to “manage the assets of emerging market entrepreneurs” heated up, and major banks looked to move away from riskier investment banking operations.

As reported, Credit Suisse declined to comment on the FT’s report.

Citibank pulling back

Credit Suisse’s plans to expand in Asia Pacific also coincide with what the South China Morning Post last month noted was an apparent reversing, by US banking giant Citigroup, of its original plans to “double the number of branches in mainland China to 100 by the end of this year”.

According to the SCMP, Citi has been shuttering branches – and cutting back on its plans to open new ones, as mentioned – in response to a decline in footfall in its branches, as clients increasingly turn to the internet for their banking needs, and the numbers of non-performing loans in China has surged.

Poor start to year

The news of Credit Suisse’s plans for its Asia Pacific operations was contained in a first-quarter results document which, market observers were quick to note, represented the company’s worst start to a year since the financial crisis.

Nevertheless, there were some positive signs, including its private banking area. This was seen as an endorsement of chief executive Tidjane Thiam’s previously-stated strategy of looking to focus on the bank’s wealth management area, while cutting back on investment banking.

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