Credit Suisse aims for 100% of securities venture in China growth plan

Credit Suisse 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.

The logo of Swiss bank Credit Suisse is seen at a branch office in Basel, Switzerland, March 2, 2020. /VCG

The logo of Swiss bank Credit Suisse is seen at a branch office in Basel, Switzerland, March 2, 2020. /VCG

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, its APAC boss Helman Sitohang told Reuters.

China has gained in relevance for Credit Suisse and other international banks after Beijing fast-tracked the opening of its financial markets to foreigner investors.

China's securities regulator on June 18 approved the application of JPMorgan Chase & Co. to operate the country's first fully foreign-owned futures business, according to a statement in Chinese posted on its website. The approval aims to deepen the opening of the futures market and bring in more qualified foreign institutions.

After gaining 51 percent control of its securities joint venture in June and appointing Janice Hu as chairwoman, Credit Suisse aims to take on full ownership from Founder Securities 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, Asia-Pacific accounted for roughly one-fifth of its overall pre-tax income in 2019, with Greater China its most important market in the region.

The bank ranks second in M&A advisory fees in Asia, excluding Japan, with a 9.3 percent market share, and second in investment banking fees, with a 4.6 percent share, Dealogic says.

In Asia-Pacific Credit Suisse not only competes with larger Zurich rival UBS, but also with other Swiss private banks including Geneva-based Pictet and listed lender Julius Baer for wealth management business. Meanwhile in investment banking, Morgan Stanley and JPMorgan are both major competitors, while Chinese investment bank CITIC Securities 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, from China Merchants Bank.

This 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 Singaporean native said from his office in Singapore.

Source(s): Reuters