Credit Suisse Group AG wants to raise its China securities joint venture stake to 100 percent and increase its market share after getting the regulatory green light to take a majority holding, the head of its Asia business said.
Switzerland’s second-largest bank is also looking to hire more staff and invest in China, the world’s second-biggest economy, as its most significant business opportunity in the world, Asia-Pacific chief executive Helman Sitohang said.
China has gained in relevance for Credit Suisse and other international banks after Beijing fast-tracked the opening of its financial markets to foreign investors.
After gaining 51 percent control of its securities joint venture last month and appointing Janice Hu (胡知鷙) as chairwoman, Credit Suisse aims to take on full ownership from Founder Securities Ltd (方正證券) as it seeks to build out its private and investment banking businesses.
Credit Suisse has placed great faith in Hu, a “veteran investment banker” who has been with it for almost two decades, to grow its business in China, where the timing of it gaining full ownership of the venture is in the hands of regulators.
The bank did not disclose the value of the joint venture.
While it does not break down its business by individual markets, the Asia-Pacific region accounted for about one-fifth of its overall pretax income last year, with greater China its most important market in the region.
The bank ranks first in mergers and acquisitions revenues in Asia, excluding Japan, with a 12.4 percent market share for the first half of this year, and first in investment banking revenues, with an 8.3 percent share, Dealogic said.
In the Asia-Pacific region, Credit Suisse not only competes with larger Zurich rival UBS Group AG, but also with other Swiss private banks, including Geneva-based Pictet & Cie and listed lender Julius Baer Group Ltd for wealth management business.
In investment banking, Morgan Stanley and JPMorgan Chase & Co are both major competitors, while Chinese investment bank Citic Securities Co (中信證券) counts as a key rival in Asia.
China is producing the most new billionaires and Credit Suisse last month hired a new head of wealth management for onshore China, Jing Wang (王菁), from China Merchants Bank (招商銀行).
That followed two senior appointments this year for prime sales and Credit Suisse is now looking to fill other key positions for its Chinese business over the next few months.
“We will continue to invest across our platforms in China, and closely integrate our onshore operations with our businesses in Hong Kong and across the region. There will be more hires, some of which we will announce shortly,” Sitohang said.
“It is clearly about tactical hiring: We want to capture opportunities. We know exactly where these are, where we see the potential to improve, and that is what we are focused on,” the 54-year-old Singaporean said from his office in the city-state.
Hong Kong’s future as a global financial center has been under scrutiny after the Chinese government last month introduced tough new national security legislation for the territory.
Sitohang reiterated Credit Suisse’s commitment to Hong Kong and said that it had not registered any outflows.
“Hong Kong has been an important hub for Credit Suisse for decades ... [and] there will be no changes to our presence,” Sitohang said, adding that it was an “integral part of our footprint for China overall.”
As well as its role in the largest equity capital markets deal in Hong Kong last year with Alibaba Group Holding Ltd’s (阿里巴巴) secondary listing, Sitohang said Credit Suisse did another recently for Netease Inc (網易), which was about US$2.8 billion, as well as “a couple of large bond deals.”
Credit Suisse has increased the money it manages in the Asia-Pacific region by about one-quarter over the past three years to 220 billion Swiss francs (US$233 billion) at the end of last year before a drop to SF197 billion in the first quarter due to the COVID-19 pandemic.
Although ties to Luckin Coffee Inc (瑞幸咖啡) — from whose chairman Credit Suisse is seeking to recoup a more than US$500 million loan along with five other banks — increased the Swiss bank’s first-quarter provisioning for loan losses, Sitohang is not put off.
Credit Suisse would stick by its strategy of acting as a “bank for entrepreneurs,” managing the private wealth of rising businesspeople, as well as benefiting from their corporate activities through its investment bank, he said.
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