Credit Suisse ‘Pruning’ Europe Investment Bank in Overhaulby
Smaller U.K.-focused clients to be covered through new unit
Changes will lead to some ‘pruning’ among employees, bank says
Credit Suisse Group AG is reorganizing its European investment banking and capital markets business and cutting some jobs, a move prompted in part by Britain’s decision to leave the European Union.
The Zurich-based lender will cover large, global companies domiciled in the U.K. through industry teams, Marisa Drew and Mark Echlin, who lead the bank’s investment banking and capital markets business in Europe, the Middle East and Africa, said in an interview Thursday. Smaller, U.K.-focused companies will be served by a newly formed advisory and corporate broking group in the country.
Credit Suisse has been hiring senior bankers in the region over recent months, including former Deutsche Bank AG executive Hendrik Aslaksen and James Peterkin from Barclays Plc. Aslaksen helps handle some of the bank’s biggest clients, while Peterkin leads the oil and gas coverage for EMEA. Peterkin’s area will be part of a newly created infrastructure group after the overhaul in reaction to rising demand for such assets from investors, Drew and Echlin said.
The changes, prompted by the U.K’s June decision to leave the EU, come on top of a planned 6,000 job cuts this year as the Swiss bank aims to free up capital and expand its wealth management business in a broader restructuring. While the weakened pound has boosted returns in U.K. stock markets since the vote, investment banking clients across the industry have become more cautious as the exact ramifications remain unclear.
While no large-scale job cuts are planned, there will be some “pruning” in her region, Drew said, without giving a number. Financial News reported the revamp earlier on Thursday.
Credit Suisse, which is scheduled to release third-quarter earnings on Nov. 3, rose 0.1 percent to 13.58 francs at 12:59 a.m. in Zurich. The shares have dropped about 37 percent this year.
Investment banking and capital markets, led by Jim Amine, saw pretax profit drop to 135 million Swiss francs ($136 million) in the second quarter, from 145 million francs in the year-earlier period. Credit Suisse ranks third on deals announced this year in EMEA, after Goldman Sachs Group Inc. and Morgan Stanley, according to data compiled by Bloomberg.
Charles Donald and Jonathan Grundy, previously co-heads of U.K. investment banking, have been named to new roles. Donald will head the new U.K. advisory and corporate broking group, while Grundy will oversee the new infrastructure team in EMEA that combines oil and gas, transportation and energy.
In addition, the bank named Vikas Seth global head of emerging markets, with responsibility for planning and coordinating investment banking and capital markets coverage. The goal is to better capture an increase in cross-border deals, Drew and Echlin said.
While the refocusing of the U.K. business was influenced by Brexit, the other changes would have probably taken place either way, Echlin and Drew said.