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Credit Suisse’s decision in Asia to stay in region after overhaul

By on November 8, 2021 0

The logo of Swiss bank Credit Suisse can be seen in a branch in Zurich, Switzerland on November 3, 2021. REUTERS / Arnd WIegmann

HONG KONG, Nov. 8 (Reuters) – Credit Suisse’s (CSGN.S) key decision-making power for Asia-Pacific will remain in the region despite the integration of the previously separate division into the bank’s larger structure in As part of its new strategy, its regional director said the executive.

The Switzerland-based bank said last week that Asia-Pacific would no longer be a stand-alone division and that its wealth management and investment banking units would be absorbed into global divisions as part of a downsizing. the bank.

The move has fueled concerns among local bankers who fear a loss of autonomy may contribute to the bank’s already shrinking market share in key investment banking divisions in Asia, two sources said.

“We have always worked with our global colleagues, whether in Europe or the United States, for example on agreements that required a global solution for customers, and collaboration through APAC will also continue. Nothing will change on that side. Helman Sitohang, chief executive of Credit Suisse for the Asia-Pacific region, told Reuters on Monday.

Sources said Credit Suisse’s stand-alone Asian private bank was a differentiator for clients and bankers.

In this structure, senior executives generally had leeway to make decisions such as balance sheet loans and staff promotions, unlike many private banks in the region which relied heavily on their headquarters for key approvals. .

A source said despite assurances from management, there are concerns that risk-taking will be reduced and the speed of decision-making will slow.

“As a region, we continue to be empowered to make decisions such as those related to market presence, key customers and human resources issues, while maintaining our decision-making speed and connectivity. to the global infrastructure that some transactions need, ”Sitohang said.

For years, Credit Suisse has been one of the most active investment banks in developing markets such as Indonesia and Vietnam, as it has won mandates from entrepreneurs and business families, often backed by funding.

Asia-Pacific contributes about 20% of Credit Suisse’s global revenue, according to its latest financial results. Its investment banking market share in Asia-Pacific, including Japan, has declined so far in 2021, according to data from Refinitiv.

The bank occupies tenth place in the announced ranking of mergers and acquisitions with a market share of 3.1%, against 4.9% for the whole of 2020.

In equity capital markets – a key driver of commission income in Asia – it has a 2% market share, up from 3.1%, according to the figures.

Sitohang said the performance of Asian investment bank Credit Suisse had been “difficult due to the various headwinds we have experienced as a company globally,” highlighting scandals involving hedge fund Archegos and supply chain financier Greensill.

But he was convinced the business could bounce back.

“The intention is to come back in force and regain our position in the market,” he said.

Reporting by Scott Murdoch in Hong Kong and Anshuman Daga in Singapore; Editing by Lincoln Feast.

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