Credit-linked structured products as a yield-enhancing tool have proven a popular and, indeed, an astute strategy for private banking clients. For a provider to clearly distinguish itself as market leader in this well-established market space is a tall order; and yet, Credit Suisse has clearly emerged as this year’s best credit-linked structured product provider, as chosen by clients.For Bikram Chaudhury, the decisive factor behind the Swiss bank’s success has been his team’s ability to generate and offer innovative ideas within a quick turnaround time. “We are smaller than others, but nimble,” asserts Chaudhury, who works closely with his team to identify trends and themes, ultimately creating structured products which click with private banking clients.
One such example of this innovation is trading bond options – a strategy where the objective is to monetise a directional view on corporate bonds. “The product is well accepted by private banking clients because the risk/ return profile is well-understood,” explains Chaudhury. “Credit Suisse has been doing well in showing tradable prices on corporate bond options and efficiently executing structured bond options.” Another popular Credit Suisse strategy is dollar debasing to obtain local currency exposure. According to Chaudhury, this works well for private banking clients who tend to have linkages to their home market and, fittingly, have views on their currencies.
It is clear, therefore, that Credit Suisse’s formula for success is based on both a solid understanding of the needs of private banking clients and its capacity to offer cost-effective, bespoke solutions in a timely manner. “Private clients look for the best risk-return point, [where] if they like your idea, they will invest,” says Chaudhury. “This market for credit-linked structured products developed quickly; so how quickly you can both develop structured products and show prices makes a difference to clients.”
The fact that Chaudhury and his team at Credit Suisse have been singled out in the Asian Private Banker Structured Products Survey and Poll as the Best Provider of Credit-linked Structured Products for 2012, shows that theirs is a winning strategy, for Credit Suisse and clients alike.