Switzerland's second-largest bank is making a raft of structural changes, including a transition of clients in the US.

Credit Suisse has unveiled sweeping organizational changes, including scaling back its US private banking brokerage for a sharper UHNW focus in the region.

There are three main elements to the wide-ranging global changes - the fruit of moves put in place under the recently-appointed chief executive Tidjane Thiam, who took over from Brady Dougan earlier this year.

“In the US, our domestic private banking business is not currently positioned to compete in scale without significant investment or acquisition,” Credit Suisse said today. “Given this limitation, the economics for Credit Suisse do not yet meet profitability criteria and, therefore, cannot achieve optimal returns for our shareholders relative to our alternatives. As a result, we have taken the decision to transition our current private banking brokerage business model and better leverage our investment banking and asset management capabilities for US UHNW clients.”

Accordingly, the Zurich-headquartered firm has struck a recruitment deal with Wells Fargo to facilitate a smoother transition of relationship managers and their clients to Wells Fargo Advisors by early 2016. Credit Suisse said the two companies expect to deepen their relationship to make additional Credit Suisse investment banking and asset management offerings available to the Wells Fargo distribution network.

While Credit Suisse made no direct reference in its statement today to a sale of its US private banking business, in September the Swiss newspaper Schweiz am Sonntag reported that the firm is planning to sell this unit.

“Credit Suisse remains committed to continuing to provide ultra high net worth US clients with a strong investment banking and asset management institutional offering,” said Rob Shafir, head of private banking and wealth management and CEO of the Americas region at Credit Suisse, in a statement.

Broad changes

Zooming out from the US, the Zurich-headquartered firm firstly said it wants to boost its position in the domestic Swiss market by growing its Swiss universal bank model to become the “bank of choice for Swiss private, corporate and institutional clients”. Credit Suisse will develop “an efficient, integrated banking platform combined with a planned IPO” for this business.

Secondly, Credit Suisse said it will “scale up its private banking and wealth management franchise in the attractive markets of Asia, Eastern Europe, the Middle East, Latin America and Africa”. The bank said it will accelerate its growth in Asia-Pacific by allocating more capital to serve the wealthy entrepreneurs of this region via a dedicated, integrated APAC division. Further, it said that in other emerging markets, the newly-established international wealth management division will replicate the “bank for entrepreneurs” Asia-Pacific model.

The final broad goal is to “right-size” the investment bank to support wealth management clients – boosting profitability and reducing the demands on capital and making earnings less volatile.

Structural changes

The bank said it will simplify the organization from the previous matrix of two business divisions, each with co-heads, and four regions, into a bank that has three new, regional divisions: Switzerland, Asia-Pacific and International Wealth Management serving Western Europe, Central and Eastern Europe, Latin America and Africa. Two other divisions – Global Markets and Investment Banking and Capital Markets (IBCM) – will sit alongside these regional businesses.

Credit Suisse said these operating businesses will be supported by a number of focused functions at the group executive board level, including a new role of chief operating officer, tasked with turning  the bank into a more “decentralized” organization. A new role of chief compliance and regulatory affairs officer is to be created.

Executive team

The bank has appointed six new members of the executive board: Pierre-Olivier Bouée, Peter Goerke, Thomas Gottstein, Iqbal Khan, Helman Sitohang and Lara Warner. All the functional heads will be based in Zurich.

Going forward, the executive board will be represented by:

• Tidjane Thiam - CEO;
• Thomas Gottstein - Swiss universal bank;
• Helman Sitohang - APAC;
• Iqbal Khan - international wealth management;
• Timothy O’Hara - global markets;
• James Amine - Investment Banking and Capital Markets;
• David Mathers - chief financial officer;
• Romeo Cerutti - general counsel;
• Joachim Oechslin - chief risk officer;
• Pierre-Olivier Bouée - chief operating officer;
• Lara Warner - chief compliance and regulatory affairs officer; and
• Peter Goerke - human resources, communications and branding,