The UBS-Credit Suisse union has unsettled private banking
Credit Suisse Group’s crown jewel is its wealth management business in Asia, judging by the tremendous personnel effort its acquirer is making. UBS Group plans to retain most of Credit Suisse’s relationship managers in the region, while cutting more than half of its smaller rival’s 45,000-strong workforce worldwide. Bonuses are being dangled for private bankers with growing client books.
Singapore-based Jin Yee Young, a long-time star banker at Credit Suisse who had left for Deutsche Bank early this year, was poached back to co-head UBS’s Asia wealth business. Young’s return was good optics, a signal that UBS desires an equal partnership, at least in Asia. Seeing the “power of two," UBS global wealth chief Iqbal Khan’s decision to retain Credit Suisse staff showcases his bet that Asia will continue to generate lucrative clients.
The merger will give UBS more relationship managers than its closest rivals DBS and HSBC combined. Meanwhile, there is some synergy here. Credit Suisse’s solid client base in southeast Asia, which Khan might hope to maintain with Young’s promotion, can complement UBS’s core strength in Hong Kong and mainland China.
Through Credit Suisse, UBS will also gain a presence in India and Australia. But how do you mix oil and water? Drastically different cultures mean the two Swiss banks’ integration can’t possibly be smooth or pleasant. First, do Credit Suisse’s relationship managers know how to pitch to clients without offering them loans? The bank has been willing to use its own balance sheet to help company founders grow their businesses, so it can win investment banking deals, such as initial public offerings, then going on to manage private wealth later.
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