Heavy Losses at Credit Suisse Asia the Savior

Credit Suisse CEO Tidjane Thiam

The numbers out of Zurich today were not good for Switzerland’s second largest bank. Credit Suisse swung to full-year loss of 2.944 billion Swiss francs from a profit in 2014 after writing down the value of Donaldson, Lufkin & Jenrette, an bank it acquired in 2000.

One small ray of hope was found in the pre-tax income of the newly created divisions of Asia Pacific (APAC), Swiss Universal Bank (SUB) and the Private Banking business within International Wealth Management (IWM), which were up by 21 percent, 25 percent and 4 percent, respectively, compared to the fourth quarter of 2014.

APAC to Drive New Strategy

Under the leadership of Helman Sitohang, whom CEO Tidjane Thiam praised during his early morning presentation in Zurich , APAC experienced continued strong growth momentum, with adjusted pre-tax income above 1 billion francs for the first time, at 1.1 billion francs for 2015.

Net new assets for the private bank for the full year were 17.8 billion francs with 3 billion francs coming in the last quarter of the year.

Overall Credit Suisse’s business in APAC benefited from a balanced geographic mix, with operations in all countries where Credit Suisse has a presence reporting profits.

The strong collaboration between Investment Banking and Private Banking continued to withstand market volatility and delivered a strong performance, notably in terms of higher lending to ultra-high-net-worth clients.

Asia Set to Grow

The recruitment of relationship managers across the bank’s Asian locations is now an important priority for CEO Thiam. Recruiting was stepped up in 2015 leading to a net increase of 70. This currently gives the bank 590 relationship managers in Asia.

The goal for the bank is to have approximately 800 relationship managers across APAC by year-end 2018. The CEO also said that a strong pipeline of potential new hires was in place.

As a reward for the robust performance capital allocation into the APAC business units will be stepped up.

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