Published June 30, 2009

Things looking up again at Credit Suisse

By SIOW LI SEN

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(SINGAPORE) It's pretty much business as usual for Credit Suisse, Switzerland's second largest bank - financial crisis notwithstanding - as the slimmed down bank continues to win the trust of the ultra rich while its investment bankers clinch mandates for transactions.

Mr Camacho: Singapore team leads in M&A deals, capital market transactions

Following a restructuring about six months ago where it slashed 5,300 jobs globally after posting a loss of 8.2 billion Swiss francs, or CHF (S$11 billion) in 2008, its biggest loss ever, things are looking up again.

Job cuts in Asia Pacific saw the departure of 60 relationship managers while the Singapore investment banking team shrank by almost 30 per cent.

In the Asia-Pacific region, fund inflows have been strong as the bank focuses on the ultra rich, Lito Camacho, vice-chairman, Credit Suisse Asia Pacific and Singapore chief executive, told BT in a recent interview.

In fact, there were continuous positive inflows in private banking net new assets in Asia Pacific through 2008 to Q1 2009 amid the market turbulence, reflecting the bank's strong financial position and performance relative to the industry, he said.

In its Q1 results, Credit Suisse posted net income of CHF 2 billion and increased its Tier 1 ratio to 14.1 per cent versus 13.3 per cent in Q4 2008 and 9.8 per cent in Q1 2008.

'Our financial strength is being recognised by clients and the community,' said Mr Camacho.

In Q1 2009, globally the private banking division generated a pre-tax income of CHF 1 billion and garnered CHF 11.4 billion net new assets.

In Asia Pacific, Credit Suisse's private banking business managed to grow the assets it manages for clients 10 per cent to CHF 53.4 billion as at March 31, 2009 from CHF 48.5 billion at end-2008.

Net new assets for the first quarter were CHF 2.6 billion, an annualised 20 per cent increase against a global rate of 5-6 per cent.

'It was much faster than 2008,' Mr Camacho said.

Net new assets inflow in 2008 and 2007 was CHF 8.4 billion and CHF 9.5 billion respectively.

The increase in business has come even as the bank shrank its headcount.

Today, Credit Suisse has 390 relationship managers (RM) in Asia Pacific, down some 13 per cent from 450 in November 2008.

'The story around RMs is upgrading. We end up hiring at the the senior level while pruning at the junior-level individuals we consider not performing,' said Mr Camacho.

With the bank focusing on serving the ultra rich who require a lot more hand holding in the current environment, it has become more important to hire senior bankers, he said.

This segment of clients also appreciates Credit Suisse's integrated approach which brings together its investment bankers, private bankers and asset management people, said Mr Camacho.

The bank's Singapore investment banking team has also been busy despite a cut in its staff strength to 30 bankers from 42 in November last year.

The Singapore team leads in merger and acquisition deals and capital-market transactions.

Last year, it advised on some of the biggest transactions here involving Temasek companies. These were the sale of three power-generating companies, the sale of Indonesian BII to Maybank and the sale of Indosat to Qatar Telecom, totalling US$11.12 billion.

From January 2008 to 2009 year to date, Credit Suisse has advised on 11 mergers and transactions worth US$13.3 billion and seven capital market transactions valued at US$1.2 billion.

In the last two months, it handled two top equity placements - Ezra's $92 million and $102 million for Raffles Education.

Mr Camacho said capital markets have been slower with volumes significantly lower than two years ago though they are beginning to come back. 'But it's too early to say if it's sustainable.'

Overall, Credit Suisse employs about 5,000 people in Singapore, with 1,700 in investment banking, private banking and asset management.

Singapore is the fourth largest Credit Suisse office after New York, London and Zurich, and hosts the bank's global support operations in IT, operations, finance and product control.