EXCLUSIVE: Embattled Credit Suisse aims to start trading Chinese assets next year.

A logo is seen on Credit Suisse Bank in Geneva, Switzerland, June 9, 2022. REUTERS/Denis Balibouse

SINGAPORE, Sept 2 (Reuters) – Credit Suisse ( CSGN.S ), hit by a series of scandals, leadership changes and global strategy changes, is still betting big on China and plans to launch a resource business there next year. A senior Asian executive said.

“While there are rumors that Credit Suisse is pulling out or pulling out of China, China is a long-term play for us,” Benjamin Cavalli, head of Asia Pacific wealth management, told Reuters in an interview.

The bank aims to start offering wealth management services in China next year, potentially as early as the first quarter of next year by securing full ownership of the local securities venture, Cavalli said.

Credit Suisse’s China expansion plans come as the bank is cutting jobs and spending elsewhere as it tries to recover from a series of losses and scandals. In July, the Swiss bank named the head of asset management as its new CEO. Read more

China’s wealth business plan for next year has not been reported before and has been linked to reports in some media that Credit Suisse is reviewing its China business.

On Thursday, Reuters reported that Switzerland’s second-largest bank, which has designated 2022 as a “transition” year, is cutting around 5,000 jobs across the group – one in 10 jobs.

Cavali said the bank is taking a long-term view on China, given its huge potential to sell wealth management products to the wealthy in the world’s second largest economy.

“We don’t go into a new market where we feel like we have to make a return for three or four years and pull the trigger. This is no different with Credit Suisse,” said Cavalli, who moved to Hong Kong in his new role this year. Singapore.

China’s wealth management market stood at 29 trillion yuan ($4.2 trillion) in June, official data showed, with banks pointing to household wealth growing faster than economic growth.

Chinese banks dominate the distribution of proprietary and third-party wealth products, with growing interest from the country’s high-net-worth individuals and mass affluents.

Emergency mode

Although Credit Suisse’s China securities business has been delayed by a number of factors, including staff departures, the bank has already replaced some senior executives and is hiring more, Cavalli said.

An inspection of the expected control area will be done soon, he said.

“We expect the full acquisition of the securities partnership to be a Q4 or Q1 event next year,” the banker said.

Two years ago, Credit Suisse said it was looking to take full ownership, raising its stake in the joint venture to 51% control.

Credit Suisse employs 50 wealth trading staff, including relationship managers, investment advisers and those involved in managing proposals.

The wealth management licensing process follows after the bank has obtained permission to fully own the securities venture.

“The wealth pool in China is significant. If I can get just 2%-3% of the wealth pool, that’s a starting point and we’d be doing a lot.”

With financial markets reeling from late 2021 and inflation worries lingering, Credit Suisse’s wealthy clients in Asia, like markets in other regions, are in risk-free mode.

“We see very little light at the end of the tunnel to suggest that there may be a recovery or that sentiment will soon turn positive,” Cavalli said.

Still, the bank’s broad footprint, with offshore wealth businesses in Japan, Australia, Thailand and India, in addition to offshore wealth centers in Singapore and Hong Kong, helped offset some of the market volatility, he said.

($1 = 6.9021 Chinese Yuan)

By Anshuman Daga report; Editing by Sumeet Chatterjee and Kim Coghill

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