He echoes sentiment of many industry observers in Asia who are bracing for consolidation amongst boutique banks. «I think there is a place for everyone, but boutique private banks are going to have to decide what they are going to be extremely good at and what they will not do. If they try to be everything, they will fail», he clarifies.
It is of course expected that Monnet would be more positive on larger banks, but to its credit Credit Suisse integrated its own independent boutique, Clariden Leu, after the financial crisis.
Size Growing Faster
Monnet, who has a PhD in philosophy, is keen to play the strength of Credit Suisse's hand: size. Asians are relationship-driven, and thus unlikely to actually fully cut bank ties, he counters. «Hence they will maintain an account with a smaller bank but only fund it marginally», Monnet says.
The issue has been the bane of many banks in the region: minimally-funded legacy accounts can sometimes cost more for the bank to maintain than they generate in revenue.
«The bulk of their (client) assets will start being consolidated with what they believe is the most comprehensive platform», he believes. «Hence the larger banks are growing at a much faster pace than the smaller banks.»
$30 Million vs $5 Million
In the first quarter of 2018, Credit Suisse hoovered up $6.3 billion in new assets in Asia – a bumper quarter when compared to what the bank had been able to achieve in previous years.
«For example, if Credit Suisse goes to a Chinese client we can ask for $30 million [in the account] and get it. A client will try out a boutique with $5 million. The commitment and maths are completely different», Monnet says.
Part of the challenge lies in finding enough talent to build the scale at which a large bank like Credit Suisse aims to operate at. «In greater China we have achieved greater productivity per relationship manager», Monnet says, «so although we have not increased the number of relationship managers significantly, we have increased our top line significantly.»
Higher Banker Productivity
Can Monnet expect top performers to keep hauling in assets, or is the bank a threshold at which the law of diminishing returns kicks in? «As you know, private banking is an 80-20 business - 20 percent of your relationship managers are responsible for 80 percent of your business», he says.
