All change in Credit Suisse revamp

Swiss bank names new investment co-leader and unveils new cost-cutting measures

PUBLISHED : Wednesday, 21 November, 2012, 12:00am
UPDATED : Wednesday, 21 November, 2012, 2:31am

Credit Suisse, the second-largest Swiss lender, has named Gael de Boissard co-leader of the investment-banking division and said it will merge asset management with the private bank to speed up cost-cutting.

De Boissard, 45, will join the executive board and lead the fixed-income business at the investment bank, while current chief Eric Varvel, 49, will head equities and advisory, the Zurich-based company said yesterday.

CEO Brady Dougan reaffirmed Credit Suisse's commitment to a fully-fledged investment bank three weeks after UBS, the biggest Swiss bank, announced it would cut 10,000 jobs and shrink debt-trading businesses to focus on money management. Dougan said Credit Suisse has already adapted the securities division to stricter regulation and will look to expand the debt unit as rivals retrench.

"We're moving into a world where the structure is much less that everybody is going to be in every business," Dougan said. "The fixed-income business particularly is going to have to dramatically change. Our market shares in fixed-income business are stable and growing."

Credit Suisse fell as much as 3.4 per cent in Swiss trading. The stock has declined 4.7 per cent this year, compared with a 28 per cent gain in UBS.

The reorganisation will create a business with two divisions, investment banking and wealth management, that would each be expected to produce half the profits of the group when markets normalise, Dougan said.

The investment bank contributed about 39 per cent of the group's pre-tax profit in the first nine months of this year. The move will also accelerate and potentially increase the cost savings Credit Suisse is targeting, Dougan said.

Credit Suisse said last month it will trim a further 1 billion Swiss francs (HK$8.22 billion) in annual costs by the end of 2015, adding to a 1 billion-franc savings programme from July and a 2 billion-franc expense reduction achieved since last year. Dougan declined to say how many jobs may be cut.

Hans-Ulrich Meister, 52, who headed the private bank, and Robert Shafir, 54, who headed asset management, will lead the combined private banking and wealth management unit, which will include the trading business.

The reorganisation "is mostly about combining activities and sharpening the focus on the cost-saving programmes, and that's really indicative of the wider pressures in the industry," said Otto Dichtl, managing director at Knight Capital Europe.