Credit Suisse Private Banking is on track to double pre-tax income from its Singapore market activities by 2019 amid a multi-year growth drive led by Young Jin Yee, market group head for the onshore business.
Young told Asian Private Banker that the business’s bottom line has “evolved significantly” since her appointment in 2015, and that growth has sustained, even during a challenging year-to-date.
“For the first half of this year, we more than tripled our NNA inflows to reach yet another historical record high, with much of that coming from collaboration activities with our investment banking team, our AUM also grew strongly at around 30%, and our recurring revenues also saw a solid double-digit increase,” Young revealed, adding that by next year she expects PTI to be double what it was when she took over the leadership.
That follows a milestone 2017, when the private bank achieved record-high NNA inflows in the Singapore market. Half of those assets came from ‘new’ RMs — a stat that is likely to please Young, who kicked off her tenure by raiding the market for senior talent and teams when other players were reevaluating their commitment to Asian private wealth management.
As a result, Credit Suisse’s RM headcount for the Singapore market surged by 50% over the course of nine months, as Young sought to lay the groundwork for an organic growth play that targeted growing the business by some 100% within a few years.
“My response was to go out and hire teams strategically by focusing on client segments and RMs who can cover clients that we had not previously been onboarding,” she said.
“Fortunately, our new-joiners have integrated well — we have had minimal attrition from non-performance and now the focus is on performance management. Most of our RMs already have a very comfortable book size. Now we want to create yield on the accounts.”
According to Young, that means doing more with what the bank has, including growing recurring revenues via higher mandate and fund sales, which both hit records in 2017. Credit Suisse’s flat-fee advisory offering, CS Invest (CSI), is also a priority, and continues to gain traction in the onshore market, which accounted for 25-30% of the initial US$3 billion in sales in the first 10 months and is now “very close” to the CHF 1 billion mark in terms of AUM.
In fact, CSI’s success is also eating into funds sales given that more fund sales are now performed through CSI, which is retrocession free.
More broadly, for the core high net worth space, Young said the private bank needs to continue to advocate structured asset allocation.
“That’s where CSI comes in, because the solution tells you about your portfolio quality and enables our RMs to have more engaging, value-added conversations with clients,” she explained, adding that her CSI target is “not low”, and “about the same” as her discretionary target.
Meanwhile, for ultra clients — arguably the private bank’s forte — Young said she will continue to stress Credit Suisse’s one-bank capabilities, which helped the Singapore business add 11 new Forbes-listers in 2017, and to deliver uncorrelated solutions, including exclusive access to hedge funds and private equity funds. Credit Suisse APAC’s financing unit will also play a big role in increasing client penetration in Singapore, which Young estimates to be around 30%.
“We are finding that new clients who also work with other banks are amazed at how Credit Suisse can put a private banker and an investment banker in a room to talk with the client about, for example, credit in a way that no one else can,” Young concluded.