In an ordinary year, Michael Marr would regularly travel from Sydney to Singapore, the seat of Credit Suisse’s South Asia business. Australia is the only one of the Swiss bank’s seven South Asia private banking markets not run from Singapore, and so these regular trips by the head of private banking for Credit Suisse Australia were a means for the Australia franchise to connect into the wider regional business and, crucially for Marr himself, to connect personally with Benjamin Cavalli, head of private banking South Asia and Singapore CEO.
However, strict COVID-19-related travel restrictions have put paid to the regular ‘touch base’ and Marr has relied on video, phone, and email channels to maintain connectivity with senior leadership.
“I’ve definitely missed meeting face-to-face with Benjamin and the other regional stakeholders of the business. It’s not been ideal, but our physical separation hasn’t had a material impact on the functioning and performance of the business, which has experienced positive revenues and asset growth in 2020,” he told Asian Private Banker.
Strong client connectivity
Marr attributed the business performance to remaining as close as possible to clients during a challenging period of persistent market volatility and uncertainty.
“Early on, we made it clear to our relationship managers that information and client connectivity were of the utmost importance in view of the level of anxiousness we were seeing,” Marr said.
“So it was really important for us to articulate what our position was, what our belief was around asset class allocation and, specifically, subsectors within asset classes.” Marr credited the bank’s chief investment officer (CIO) and team for the timing of its calls.
Globally, the bank reduced equity exposure in early January at the outset of the virus outbreak, remained neutral on the asset class before going overweight tactically near the end of March and on the heels of the crash. On the bonds side, it went neutral on global IG and overweight EM hard currency in late March, turning overweight on the former in mid-May.
In Australia, Credit Suisse introduced weekly client calls covering markets, the bank’s global and local views around asset class tilts, and outside perspectives on trends pertinent to the domestic market. Several hundred clients joined each call, Marr said.
The jewel in the crown
That intensive communication and hand-holding was especially important for the Swiss bank’s Australian discretionary portfolio management business (which all clients held on to during the March downturn) — what Marr describes as ‘the jewel in the bank’s crown’.
Clients who had invested in discretionary and advisory portfolios in the second half of 2019 were the subject of heightened attention because of their exposure to sequencing risk, he noted.
“The important thing is that when you are talking to new clients about what their strategy should be and the historical impact of a drawdown on a given portfolio, you must make it clear to them that this could happen the day after they have invested,” explained Marr.
He pointed out that the 2019 performance of the Credit Suisse Balanced Portfolio would have provided clients with a “fair amount of confidence” in the strategy as volatility ratcheted up earlier in 2020. “So I’m not surprised that our discretionary business has grown at the rate it has,” he added.
Growing new talent
Meanwhile, Credit Suisse has continued to build its bench strength through 2020. In October it added three new relationship managers to complement its internal ‘grow-your-own’ programme for developing new talent.
The hires come at a time when local rivals revisit private wealth-related headcount. ANZ cut 230 private banking and advisory roles in 2020, while NAB in June said it was aiming to add at least 50 HNW-focused bankers and financial advisers.