Credit Suisse's Asian bankers could be spared in the cuts
Credit Suisse’s CEO Ulrich Körner is making radical changes to its investment bank to make it “simpler, more stable and with a more focused business model built around client needs.”
The most striking aspect of the plan is to spin-off its investment banking and capital markets division into a new capital markets and advisory firm called CS First Boston.
Michael Klein, who has been appointed CEO of CSFB, will now spend the coming months deciding which businesses and teams will move across, and which will be cut. One source said that overall, the new CSFB could have around 2,000 staff globally based on its current businesses.
Not everyone will move across. CSFB will be headquartered in New York, where it will retain all of the products it currently offers in US IBCM, including mergers and acqusitions (M&A) advisory, debt and equity underwriting and leveraged finance. But Körner said in his presentation that the bank will provide a “capital light and focused offering” outside North America to support global clients.
What does this mean in pratice? When asked by analysts about what CSFB will look like outside the US, Körner offered reassurance to the firm’s investment bankers in Asia. He said that while the European business will focus only on advisory going forward, in Asia CSFB offer “a more full and broader offering." The implication is that while European ECM and DCM bankers will lose their jobs, their Asian colleagues may survive. Körner added that CSFB’s business in Asia will be important in delivering the ‘global connectivity’ of the new CSFB.
Much of the detail is still to be worked out and one banker said it could take two years for the carve out and creation of CSFB to be completed. More immediately, the bank’s existing IBCM business in APAC could come under new management after Ken Pang, who is currently co-head of the investment bank for the APAC region and co-head of global trading solutions, was appointed co-head of the bank’s newly revamped markets business.
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