Credit Suisse: Return to American Wealthy?

The Swiss bank exited private banking in the U.S. three years ago. Now, signs are mounting that Credit Suisse is planning to return – with Switzerland playing a key role. 

When Tidjane Thiam presented his turnaround strategy for Credit Suisse late in 2015, he said the Swiss bank would only chase profitable growth. The move cemented the fate of Credit Suisse's roughly 250-adviser business in North America, which was sold to U.S. heavyweight Wells Fargo.

Credit Suisse has steered clear of the U.S. wealthy since the eventful Wells Fargo deal (with some exceptions) – until now. Signs are mounting that the Zurich-based bank is rethinking its strategy with America's wealthy.

Growth for Share Price

The move is sensible: Credit Suisse has consistently shifted its strategy towards wealth management under Thiam in the last three years – and the U.S. is simply the world's largest private banking market. In addition, shareholders are keen for a new narrative after Credit Suisse wrapped up the three-year restructuring; the stock price illustrates that dividends alone won't do it.

Shareholders want growth instead – and the U.S. might be the fastest way to tap it. Consulting firm EY calculates that America's super-rich will sit on more than $28 trillion by 2021 (see graph below) – more than any other region. «The market is extremely attractive,» EY notes dryly.

Stowing in Switzerland

The statistics will be familiar to Thiam, who has said previously that while the U.S. is the largest wealth market in the world, it is also the most «over-serviced». Even after selling to Wells Fargo four years ago, Credit Suisse maintained a small team of investment bankers. This team of roughly 20 bankers, overseen by former UBS banker Charles Buckley, ensures super-rich clients and family offices have access to products like Lombard loans.

Alongside Buckley's team, Credit Suisse plans to return to private banking with U.S. clients – but from Switzerland. Credit Suisse's strategy is based on the belief that Americans will increasingly want to stow their money outside the country. The motivation isn't tax evasion, but to find safe harbor for some assets in view of trade wars and erratic U.S. foreign policy.