ZURICH- Credit Suisse is banking on risk-taking billionaires to drive revenue growth at its wealth management division.
While most private banking clients are trying to shield their wealth from the coronavirus uncertainty by buying hedges or shifting into cash, the world’s super-rich are using the market tumult as an opportunity to bargain-hunt for acquisitions and invest in higher-risk assets such as stock options and high-yield bonds.
Philipp Wehle, the head of Credit Suisse’s international wealth management division, estimates this sort of activity could bring in around $400 million in additional revenues between now and the end of 2022.
“My ambition for strategic clients is to double the growth contribution over the next three years,” said the German native, who took over as Credit Suisse’s top banker for international jet-setters last July after former boss Iqbal Khan left to head wealth at UBS.
“We, myself included, are now having more discussions with clients on how to invest or reinvest into the markets, how to build strategic positions,” he said. “Some of our strategic clients are looking to go into more risky assets, after deleveraging before.”
“This trend is visible from conversations with ultra wealthy clients but also from business activity we were seeing. The level of transactions in April was still above pre-crisis levels.”
Wehle’s division grew revenues 6 percent to 1.5 billion francs in the first quarter due to clients trading more. The division accounts for just under half of the bank’s overall pre-tax profit.