CREDIT SUISSE Group AG is considering a return to US wealth management after a four-year absence as Chief Executive Officer Tidjane Thiam seeks to boost growth in private banking.
Talks have focused on adding $15 billion of assets under management at a new base in Miami, mostly catering to wealthy Latin Americans, people familiar with the matter said. If the bank moves ahead, it could employ up to 30 people including control and support staff in Florida, the people said, asking not to be identified as the talks are private. No final decision has been taken and talks are at an early stage, they said.
The venture would be symbolically important for the Swiss bank, marking a return to private banking on US soil after an agreement to transfer its US brokerage to Wells Fargo & Co. in 2015 after a fine related to client tax evasion. The US is one of the biggest offshore wealth centers in the world, with Miami especially favored by Latin America clients because of its close geographic and cultural links. Buoyed by a more favorable regulatory environment, the US is likely to see strong growth from Latin American and Asian investors, according to the BCG Global Wealth Report.
A spokesman for Credit Suisse declined to comment.
Switzerland’s second-biggest lender reached an agreement in 2014 to plead guilty and pay about $2.6 billion to the US Justice Department and regulators for helping US citizens hide money. The bank shifted strategy a year later under Thiam, who sought to bolster returns by focusing on the home market of Switzerland and expanding in Asian wealth management. The bank agreed the brokerage transfer a year later.
The plans are an example of how Thiam is planning to kickstart growth in wealth management in the coming years as negative interest rates and cautious clients depress margins in Europe. The US ranks as the fourth largest country for offshore wealth behind Switzerland, Hong Kong and Singapore, and is likely to hold about $1 trillion for non-US residents by 2023, according to BCG.
Credit Suisse’s international wealth management business has focused on Latin America, Europe, the Middle East and Africa and was led until recently by Iqbal Khan, who moved to rival UBS Group AG. He was replaced by Philipp Wehle.
Thiam has been devoting more face time to top private bankers and holding talks on boosting pay as he seeks to prevent defections after Khan’s exit, according to people familiar with the matter. The CEO has been reaching out to the best revenue generators at the international wealth business to discuss compensation and career prospects since Khan left in the summer, paying particular attention to emerging markets such as Brazil, the Middle East and emerging Europe, the people said.
A scandal erupted over Khan’s departure after it was reported that Credit Suisse had its former employee followed to make sure he didn’t try to encourage others to defect. The bank’s own probe led to the ouster of Chief Operating Officer Pierre-Olivier Bouee, a key ally of the CEO, though it didn’t find wrongdoing on Thiam’s part. — Bloomberg