Credit Suisse To Ramp Up Lending To World's Wealthiest People

Credit Suisse expects increased lending to the world's wealthiest individuals to play an integral role in helping its shift towards a wealth management-oriented business model succeed.

Approximately a third of the Swiss firm's $29.8 billion of net new assets taken in last year at its international wealth management and Asia-Pacific units came through lending, Credit Suisse's chief financial officer David Mathers reportedly told Reuters.

“As we mature our wealth management offering outside of Switzerland, we certainly think that lending has to be a core part of our offering,” he reportedly told the news service in an interview. “Therefore, I would expect it to grow...This growth in our lending and in our net new assets is driving our net interest income, which has increased by 26 per cent, 16 per cent and 9 per cent in IWM, APAC and Swiss universal bank respectively.”

Credit Suisse's chief executive, Tidjane Thiam, is looking to drive the bank's business to focus on wealth management and place less emphasis on investment banking.

Lending to the super-rich can often pay off, as wealthy clients reinvest the borrowed cash with the private bank, which can then count this as new money. Net new money is an important factor in gauging future earnings in private banking.

Meanwhile, Credit Suisse recently named Christian Berchem as CEO of its UK private banking business.

Berchem is set to join the Swiss banking giant from Barclays Wealth, where he most recently acted as head of the firm's private bank for London. In that role, he helped drive the group's key client and ultra-high net worth businesses.

He will take the reins from Philip Harris, who has led the business over the past three years, on 7 June, subject to regulatory approval. Harris will remain CEO until Berchem takes over to ensure a seamless handover, Credit Suisse says, adding that he will then become a senior client advisor within Credit Suisse's UK private bank.

Source: wealthbriefing

Nick Kalikajaros 2017