Michael Klein’s plans to carve out Credit Suisse’s investment banking and capital markets business could take years to reach fruition, but the Swiss bank is wasting no time in bringing big parts of its Asia-Pacific business under its control.
The bank’s APAC financing group (AFG) has moved back into the bank’s wealth management division after a brief spell in a joint venture with investment banking and capital markets.
AFG was formed after previous CEO Thomas Gottstein dismantled Credit Suisse’s fragmented regional model and brought the APAC IBCM and markets businesses back into the investment bank.
The purpose of creating AFG JV was to preserve Credit Suisse’s structuring and financing execution expertise, which generates a lot of revenues for the bank in the region.
But the ousting of Gottstein and the new strategy under new CEO Ulrich Körner, announced in October last year, has changed the approach. With Klein looking to re-invent IBCM as CS First Boston, and with a focus on mergers and acquisitions advisory and capital markets, the AFG JV has been disbanded.
As a result, AFG will now be part of wealth management with no formal ties to IBCM, although one source close to the bank said that CS First Boston bankers will work with WM to introduce client opportunities to this business.
AFG is run jointly by Tim Tu and Aaron Oh, who were appointed in May 2022.
Tu was most previously the chief executive of Credit Suisse’s China securities venture, while Oh is the vice chairman of investment banking for Asia and regional head of structured solutions.
“AFG was a plum business for Credit Suisse in Asia, and without it Credit Suisse’s IBCM business is rather lean,” said one former banker. “In APAC, Credit Suisse’s structured lending business was a powerhouse.”
The bank has recently cut jobs in IBCM across APAC as part of its plan to reduce headcount by 2,700 during the fourth quarter of 2022.
The former banker added: “There’s a lot of uncertainty across the organization while the carve-out happens. But there’s a sense that there may not be much left of the traditional IBCM APAC business.”
Credit Suisse declined to comment.
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