Jittery rich lose 8% in private banks

Credit Suisse has turned to marketing structured products in a bid to capture ground lost to its Swiss and American rivals.

Credit Suisse Private Banking in Zurich has been defending its poor 2002 performance and has laid out a blueprint to get back onto terms with rivals UBS and Merrill Lynch. According to the just released study of the world’s leading private banks from wealth management consultancy Scorpio Partnership, Credit Suisse was hit more than any other banks in the top 10 during 2002, losing 13 per cent of its assets in Swiss Franc terms. Ruth Stadelmann, Zurich-based spokeswoman for CSPB, said the main culprits were an adverse foreign exchange effect and poor markets. But she added that worried domestic clients in the Swiss market also made substantial withdrawals after reading scare stories in the Swiss newspapers. Funds also left for domestic Italian institutions following the latest tax amnesty. But she said Credit Suisse is facing the future. “We are now well-positioned to attract and gain new assets.” Fresh initiatives include an on-going restructure in Spanish and German operations. The mass-affluent segment is no longer being targeted in these countries, with a renewed emphasis on private banking. Products created to serve this client base will focus on predominantly institutional style solutions of investment bank-structured and capital protected solutions and alternative investments. Up to 900 group jobs will be cut, predominantly in Swiss banking. Robin Pagnamenta, author of the Scorpio report, said: “There is a suggestion that customers decided to take money elsewhere due to the uncertainty of Credit Suisse’s future”. Citigroup, said Mr Pagnamenta, was the only bank in the whole sample which increased both assets under management and profits during 2002, due to a wider regional presence. His report said the world’s richest people, those with over $1m to invest, saw their invested savings slip by an average of 8 per cent last year. The super-rich remain jittery about the threat of terrorism and Middle Eastern war.