Credit Suisse is betting it can turn around its unprofitable U.S. private wealth business with new loan products and a focus on the ultra-rich, a strategy greeted with scepticism by some securities analysts and former officials at the bank.
Reuters reports that bank executives say Credit Suisse Securities (USA) can make money by focusing on ultra-wealthy clients who use multiple investment banking and personal investment services, and by introducing products that generate relatively high and sustainable interest income even when rates are low.
Profit margins can rise by cutting compensation costs through layoffs, training brokers internally rather than through expensive recruiting, and better use of technology to lower back-office costs and improve sales, they say.
The U.S. wealth business is a small part of revenue at the bank, but getting it into the black is becoming increasingly important to Credit Suisse.
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