Credit Suisse Group AG yesterday vowed to boost its business with rich clients and cut costs through simplifying technology as it seeks to emerge from two years of scandal and losses.
The bank outlined plans to grow the wealth unit by focusing on priority markets such as Hong Kong and Singapore, in a presentation for an “investor deep dive” that gave more detail on how it wants to reach its targets while improving risk management.
Credit Suisse announced about 800 million Swiss francs (US$838 million) in savings from centralizing technology, including SF200 million this year and again next, with an additional SF400 million over the medium term.
Photo: Reuters
The bank last year laid out a companywide cost-savings target of more than SF1 billion, which earlier this month it said it plans to accelerate.
CEO Thomas Gottstein and chairman Axel Lehmann are trying to regain investor confidence after scandals such as the blow-up of client Archegos Capital Management eroded investor confidence, weakened key businesses and prompted an exodus of talent.
Credit Suisse has changed almost its entire executive team and half of its board of directors in the past year in an effort to move past the crisis.
The wealth unit plans to double client assets under management for private market investments and expand programs that focus on sustainability and the next generation set to inherit wealth.
Credit Suisse also expects mid to high-single-digit growth in lending to rich clients by 2024, while rising interest rates are set to add SF800 million in income.
After its exit from Sub-Saharan markets, Credit Suisse said it might leave more regions where it does not have sufficient scale, narrowing its focus to the 20 markets that drive the majority of the wealth unit’s business volume.
The bank highlighted its effort to cut risk as predictions of a global recession mount, saying it reduced its emerging markets credit exposure by 21 percent and its non-investment grade portfolio by 17 percent in the year that ended in March.
The Swiss firm also said it added about 500 people in its compliance division since 2019 and will spend about 70 percent more on cybersecurity this year than it did in 2020.
Credit Suisse already presented its group-wide strategy in November last year, consisting of shrinking the investment bank and shifting about US$3 billion of capital to the wealth management unit.
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