The Swiss bank is rolling its business with wealthy clients into one unit and strengthening it at the expense of its investment bank.
Credit Suisse will cut its Asian Pacific division and divide the business into wealth management, investment bank, Swiss bank and asset management, according to a statement Thursday.
This streamlines its three private banks into one as finews.com reported. The bank will announce the heads of its new units by year-end. The new strategy comes after António Horta-Osório, a 57-year-old Portuguese-British banker, took over six months ago as chairman at Credit Suisse after its finances, capital, and reputation took a severe hit.
Thwarted Ambitions
The bank will reduce capital in the investment bank by more than $3 billion by the end of 2022, while it will reassign capital to the newly formed private bank. It is exiting from prime brokerage, where its Archegos client imploded earlier this year.
The weakening of its investment banking business is an admission that it has finally renounced its Wall Street ambitions which, in the face of more than $5 billion in losses from Archegos earlier this year, proved difficult to hold onto.
Downward Spiral
Credit Suisse’s downward spiral started in March when the bank pulled the plug on a $10.1 billion line of supply chain funds managed by Greensill. The U.K. boutique subsequently went under, leaving the Swiss bank’s fund clients sitting on losses.
The unwinding of the Asian division represents a departure from the structure installed by the bank’s former CEO Tidjane Thiam for who wanted to capitalize on Asia’s booming market by winning entrepreneurs for its private wealth business and vice versa.
