Credit Suisse To Offer Wealth Management Service In China
The second largest bank in Switzerland, Credit Suisse, has unveiled its plan to go big with its China plans. The bank wants to launch a wealth management service in China in 2023.
Credit Suisse Eyes Wealth Management Service In China
Meanwhile, the Swiss bank has been linked to several scandals surrounding management changes. However, Benjamin Cavalli, the leader of the company’s Asia Pacific business, said the company is not leaving China.
“Rumors are circulating around that Credit Suisse is leaving China. This is not true. However, China remains a long-term goal for the company,” Cavalli stated.
The bank plans to start providing wealth management solutions in China in 2023. Cavalli added that the bank is fighting to secure complete possession of its local securities enterprise. This possession could take place in Q1 2023.
Moreover, this plan comes as the firm is cutting costs and jobs in other areas. The aim is to help the company recover from various scandals and losses.
Also, rumors exist that the company is reviewing its operations in China. On Thursday, Reuters reported that the Swiss bank, which termed this year a transition period, is currently cutting down over 5,000 jobs.
According to Cavalli, the banking firm has China in its long-term project. This is because China is the second largest economy in the world. Hence, it would be profitable for the firm to sell wealth management solutions to the rich in China.
Cavalli told Reuters that the company would never enter a market where we need a 3-4 years payback period and then pull out. Hence, Credit Suisse is still betting big on China.
The Growth Of China’s Wealth Management Market
Furthermore, in June, the wealth management market in China was over $4.2 trillion (29 trillion yuan). Also, banks revealed that household wealth is growing faster compared to economic growth.
In addition, Chinese banks have the largest cut when it comes to distributing third-party and proprietary wealth products. Besides, the demand from affluent and high-networth individuals is increasing.
Also, several factors have delayed the company’s Chinese securities enterprise. This includes staff departures, although the bank has plans to hire more executives.
The leader concluded, saying that the firm’s wealth business in other countries has helped to balance some of its market volatility. The company has onshore wealth centers in Thailand, India, Australia, and Japan. Also, it has offshore wealth businesses in Hong Kong and Singapore.
Meanwhile, the wider market in 2022 have fallen greatly. Hence, wealth management solutions is one service that could increase significantly.
Investors are currently in risk-off mode as more assets have witnessed huge declines recently. Even Nasdaq have joined the bearish market.
Regardless, the Swiss bank’s strategy appears Good since China has the market. Also, the presence of onshore services can help the company return to its previous glory.