Credit Suisse’s Asian profits surge 140% as traders and private bankers outperform

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Credit Suisse’s Asian profits surge 140% as traders and private bankers outperform

Equity traders and private bankers at Credit Suisse in Asia enjoyed a bumper opening quarter as APAC profits surged at the Swiss firm. The bank’s strong regional performance raises hopes that it can reduce the risk of employees departing in Hong Kong and Singapore in the wake of the Archegos Capital management scandal. Globally, Credit Suisse posted a net loss of CHF 252m because of what it’s now calling the “US-based hedge fund matter”.

In Credit Suisse’s Asia Pacific division, which incorporates both investment banking and wealth management, Q1 profits before taxes increased 140% year-on-year to CHF 524m. Net revenues were up 27% to CHF 1,060m, “mainly driven by higher transaction-based revenues and an Allfunds Group equity investment revaluation gain”, according to Credit Suisse’s financial report.

While the bank didn’t break out its trading numbers for Asia, it attributed a 15% global rise in equity sales and trading revenues to a robust performance in that region. “Equity derivatives revenues increased, driven by significantly higher structured equity derivatives trading activity, reflecting higher volumes, particularly in Asia. In addition, cash equities revenues increased, due to higher secondary trading volumes with particular strength in Asia.”

In Asian private banking – CS is the second largest wealth manager in the region behind UBS – assets under management of CHF 241.9bn were CHF 44.9bn higher than in Q1 last year. Credit Suisse’s headcount of relationship managers inched up from 620 to 630 over the same period. After losing RMs in 2020 (its headcount fell to 600 inn Q4), however, Credit Suisse hired 30 private bankers in Q1 alone, signaling its intent to pick up talent in the post-bonus season.

Notably, RMs at Credit Suisse in Asia are becoming more productive. The average RM managed CHF 384m in assets in Q1, compared with CHF 318m a year previously – an increase of 21%.

Elsewhere, the APAC division was boosted by “higher financing revenues, higher brokerage and product issuing fees, higher equity under writing revenues, higher revenues from completed mergers and acquisitions (M&A) transactions and higher revenues from GTS” (global trading solutions).

While CS staff in Asia experienced a strong first quarter, they were not exempted from global cost cutting, including cuts to bonuses. “Compensation and benefits in the region decreased 2% year-on-year, reflecting lower deferred compensation expenses from prior-year awards, lower discretionary compensation expenses and lower employee benefits, partially offset by higher salary expenses.”

Photo by Paolo Nicolello on Unsplash

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