Exclusive | Credit Suisse to replicate Asia business model eventually after integration almost tripled income
CEO Tidjane Thiam sees unicorns from Asia - particularly China - as the group’s focus, with growing wealth creation from Asian entrepreneurs
Credit Suisse said it could replicate its Asia-Pacific business model - where it’s organised as an regional entity with its own balance sheet and division head - over time, after the integrated region almost tripled its pre-tax income last year.
“People ask why we invest so much in Asia, and my simple answer is this is the region with 70 per cent of the world population,” the bank’s chief executive Tidjane Thiam said in an interview with the South China Morning Post during the start of its four-day Asian Investment Conference in Hong Kong. “You succeed or you fail, in Asia.”
The Asia-Pacific business of Credit Suisse, led by chief executive Helman Sitohang, accounted for about 29 per cent of the group’s 2.76 billion Swiss francs (US$2.89 billion ) in 2017 pre-tax income, and saw its wealth management, advisory and financing businesses almost tripling in pre-tax income to 820 million francs from 285 million francs in 2015.
But for its Asia ‘markets’ business, which includes the performance of its equities, fixed income and prime brokerage businesses, it sank into a 28 million francs pre-tax loss for 2017, from a profit of 275 million francs in 2016.
“By having one person accountable for Asia, it improves our performance, and this is what we have delivered in Asia, which represents the most accomplished form of our model,” said Thiam.
Asia, particular the explosive growth in mainland China, will continue to be the driver of new wealth creation by entrepreneurs, Thiam said. The unique region-focused model in Asia could be replicated in the wealth management businesses outside Asia and Switzerland, which is the other region-focused, independent unit of the group.