Credit Suisse chief has high hopes for Asia

PUBLISHED : Monday, 28 March, 2011, 12:00am
UPDATED : Monday, 28 March, 2011, 12:00am

Despite the earthquake, tsunami and radiation crisis in Japan and monetary tightening policy in China, Credit Suisse chief executive Brady Dougan is optimistic about growth in Asia over the next five years.

The head of Credit Suisse, one of the largest banks in Switzerland, expects Asian revenues to grow to about 25 to 30 per cent of total group revenues in five years, up from about 10 per cent at the moment.

'Asia has been one of the fastest-growing regions worldwide over the past few years,' he said. 'We believe we are going to achieve positive growth in Asia in investment banking, asset management and private banking.' Speaking in an interview with the South China Morning Post in Hong Kong last week, Dougan said he was positive that all countries in Asia would record good growth, including Japan which was badly hurt by its recent disasters.

'In terms of our business in Japan, we have actually been gaining market share over the past week,' he said. 'Our 600-strong Tokyo office remains open for business and, besides making sure our business runs as usual, we also want to contribute to rebuilding efforts.'

Dougan, who has lived and worked in Japan for 10 years, said he believed the country would soon recover from the crisis. 'We are in Japan for the long term and are not going to be affected by this,' he said. 'We think it will only have a short-term market impact.'

The mainland, which has also adopted tightening measures by increasing interest rates several times this year to control inflation, is another major market for Credit Suisse.

Dougan said mainland firms still required investment banking services to help with fund-raising needs and many newly created millionaires and tycoons would need wealth management and private banking services. Credit Suisse investment bank also helped companies with mergers and acquisitions, as well as new listings.

'We are very committed to offering our global network and products to meet the financial needs of these customers,' he said. 'We are not just selling products. We want to be known for being a partner to our customers by providing the right solutions for their needs.'

The bank, which did not take any government funding during the global financial crisis, has attracted more new client money over the past few years, and one of its fastest growing fields is wealth management for Asian clients.

Singapore, Hong Kong, Japan, Australia and India have been the major developing markets for Credit Suisse's wealth management business in recent years. Asia's economic boom meant Credit Suisse achieved an annual growth rate of around 20 per cent in new assets in private banking in the Asia Pacific area in the past two years.

The bank had private banking assets under management of 932.9 billion Swiss francs (HK$7.9 trillion) at the end of last year. It serves about two million high net worth clients around the globe, making it one of the world's largest wealth management players.

It employs 4,200 relationship managers globally to serve these clients. In the Asia Pacific region alone, it has 360 relationship managers to manage 78.5 billion Swiss francs of client assets. Dougan said the bank would continue to hire more, particularly for the China and India markets.

Total net new assets (NNA) from its private banking clients globally stood at 54.6 billion Swiss francs last year, up 31.3 per cent from a year earlier. Total NNA from wealth management client inflows since 2008 amounted to 125 billion Swiss francs, including 32 billion in Asia.

'We have recorded consistent and strong growth in client assets,' Dougan said. 'This shows clients have trust in us.'

He believes the challenge banks face will be new regulatory requirements, since Switzerland set higher capital requirements for its lenders. This led Credit Suisse to issue 8 billion Swiss francs equivalent of contingent convertible bonds in February .

'But I think a higher capital requirement is a healthy move for the banking industry for the long-term,' he said. 'We do not have any fund-raising plans in the near term.'