Credit Suisse is reportedly considering to merge its private banking divisions in a bid to improve controls, reduce costs, streamline products and reorganize the business into a more attractive merger partner.
Credit Suisse is discussing potential plans to merge its private banking business, currently split into three divisions – the international business, Swiss business and the Asia Pacific business – according to a «Reuters» report citing unnamed sources.
Discussions were being held among Credit Suisse executives in Swiss municipality Bad Ragaz, some of whom believed that separation has not been effective while combining the three units could yield benefits.
Potential Moves
Options considered for a reorganization include either the combination of its APAC and international division or further folding of its private banking business for ultra-wealth clients in its home market, which sits under the Swiss division.
A combined unit may also see new leadership, the report said, adding the bank’s freshly appointed chairman Antonio Horta-Osorio was driving key decision.
Key Benefits
According to the report, potential benefits from a more centralized private banking business include tighter Swiss controls from reduced autonomy of local managers in Asia and internationally, reduced costs and streamlined products and potentially improved collaboration with the investment bank.
A repackaging that could also help make Credit Suisse a more attractive merger partner – a possibility that executives called «the elephant in the room».
Broader Restructuring
Discussions about reorganizing the private bank are part of broader restructuring plans for Credit Suisse after the twin failures from family office Archegos and Greensill supply chain funds.
Options being discussed include spinning off the local Swiss bank to prepare the rest of the business for a merger; downsizing the investment bank or selling the asset management unit, according to previous reports.
Most notable amongst the options being considered is a merger with UBS, an increasingly attractive move due to fears of a hostile takeover by foreign investors.
