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00:00The Asia investment conference that you hosted every year is something that draws a lot of attention. How important is it for you and your business in this part of the world. It's extremely important. It's our flagship conference globally. If we've been doing for many years now obviously this year it's all virtual. But we have started on the 22nd of March until the twenty sixth of March. We have 300 corporates 2005 when the clients on the plus speakers I'm really looking forward to it and the interest is very strong. Tell me where does Asia fit in your hope business now. Asia is absolutely core to our business. It's almost 20 percent of our franchise revenues globally which is technically more than most of our global peers who are more in the mid teens or I think on average 12 percent. So Asia is very important. And Credit Suisse has a fantastic brand name in Asia. We have obviously strong positions in Singapore and Hong Kong as our two main hubs but across across the region. And it's the highest growth in terms of existing growth but also going forward growth potential. Again where are you going to get that growth. I mean the obvious answer is going to be China. How do you do that in China. I mean you have your Asia CEO the other day. And he was saying that it's very important that you get 100 percent of your China joint venture. Is that the only mechanism which weeks with which you will grow in China or are the plans there as well. You have to right that China is very important. We have at the moment more. I would say offshore business and not onshore private banking. And in terms of investment banking we just secured fifty one percent in our securities joint venture. Credit Suisse founders and the plan is is to go to 100 percent. We see it as a fantastic growth opportunity for both our business. BD Private banking related business or corporate investment banking related business. Right. So when you look at that I mean as I asked you before is it the J.V. or you get one percent of it. Is that going to be the key driver in China or what else do you use that to. The Chinese made investment banking. So what we want to have is the all the licenses needed for our own private banking plants be it traditional private banking be the asset management be it lending corporate banking. So it's a multi-year plan. And we have a hiring plan as well working closely together with the team that we already have in Hong Kong and in other areas. So it's it's across both businesses. But. But the joint venture is is primarily investment banking joint venture. We also have an asset management chart joint venture where we own a 20 percent stake with ICBC. And that is also growing very nicely. And obviously if you want to further strengthen that collaboration tell us a little bit about other parts of the region and where you want to grow particular. Singapore is doing extremely well in terms of the whole infrastructure. And in terms of the situation as a hub for us. But we are covering other markets in Southeast Asia like Indonesia where we have traditionally very strong position Malaysia Thailand. We see a lot of opportunities in Korea South Korea. We see opportunities in Vietnam. So it's really a collection of markets where we see opportunities including on more mature markets like Australia and Japan outside Switzerland. Our focus is on the upper high net worth and ultra high net worth markets. And that's where we have been growing fast this that it's also the market that grows the fastest. So if you take the entire wealth management market opportunity globally and also the region the ultra high net worth market is growing faster than the rest of the market. So it's traditionally in the high single digits if not double digits. OK so it gives a sense of your hiring plans. So we are planning to hire between 100 and hundred and fifty over the next two years in in Southeast Asia and similar numbers if not slightly more for our onshore show rollout than in China. Let's just took a little bit about how overall cool it has hit the business and how much of an uplift are you seeing now in a macro sense is that we slowly perhaps and arguably come out of it. Well we clearly see the Asia region to be ahead of the West whether it's Europe or the US. We already see the activity picking up. We expect Europe and the US to follow in the second half. We are very optimistic that the second half especially will be strong in terms of recovery. Also in Europe and in the US we are obviously aware there will be also companies that may have to go through restructuring or even worse. So credit losses will continue to be a topic but it's more to specific credit losses. And we expect those channel provisions to come down and maybe even reverse. And that's why we are actually quite optimistic that this should help also European personnel in 2021. Because when you look at risk we have to talk about green silk here. How much of an impact is this going to have on your business. Well look Greendale is part of our asset management. They say to the first instance an asset management problem we are working with the administrators of Greenfield Capital and we are humps and focus to get as much money back as possible. In parallel to that we are at the board has put in place an investigation whether there were shortcomings in the first or second line of defense. It's too early to talk about that. Clearly it's a building situation but I'm actually confident that we will come out stronger from this from this episode. It's it's a learning process. We have announced to take asset management out of IWM and put it under leadership of the customer who will directly report to me. It will be its own division with their own first and second line a divisional support that it needs in their wards. Let's talk a little bit about the magnitude of the financial hit you may well have. How many some teams in the frank. Do you think you'll get back and what ultimately will investors be left with and how much will you be left with to carry the burden and how much of it is insured. Well we cannot comment on that at this stage. Please. You have to understand it. Otherwise he would have communicated it already. But you were absolutely right. We already had a strategic review of the asset management business. I was never a big fan of the fact that as a badge and was part of IWM and this screen sale situation has now accelerated what I was planning anyway to take it out of IWM. So CONOR will not put his team together and will take asset management to the next level. Where does the responsibility to senior level stop with have all or are you considering further actions. Well this will be subject to the review that I said that the board is doing right now. We are focused on finding the best solution for our fund investors. That's our priority. Our priority as a matching team is to get the best solution for them. And in parallel there will be an investigation and I'm not going to speculate on the outcome of that. One more question. If you split up the asset management to do it see it actually being spun off into a completely separate entity which could be independent. That's potentially part of the plan. But the most important one is now it's its own division. It's in different legal entities. Having a holding company around that could be something we are pursuing and risk control. Final question sorry. Is one of your top priorities right now in view of what's been happening. Risk control has always been a top priority. It's it's key to every bank. So I'm absolutely focused on that. Not only now I was in and I will be. Well in some languages that there's no such word as crisis. There's only the word opportunity. Does this present an opportunity and does it present an opportunity for your incoming chairman here as well who of course will be joining very soon Mr. Antonio Horta Osorio. And do you expect a review from him of the business and a change in strategy with of course in tandem and discussions with you. You're absolutely right. Every crisis represents also an opportunity. That's exactly how I look at this. And absolutely when Antonio will join this will be certainly one of the key topics we will talk about when when he's elected on the 30th of April. Many starts in early May. OK. So this thing is also perhaps it was something being touted last year that you could be involved with a merger with UBS. And I think the UBS chief executive has said that there's no such action likely to happen in the near term. Can you envisage it. I think the topic of UBS is not the topic at all but the overall theme of consolidation continues to be a very relevant theme for all banks in Europe. It's a market that is challenged by negative interest rates and the need to invest in digitalization. In that risk and compliance and is a market that is in most countries still over bank. So consolidation will continue. And Credit Suisse would like to be part of that consolidation. There are various opportunities in various areas for us and particularly in private banking which we are looking at. And that will continue to be part of our growth strategy which is predominantly an organic growth strategy. But we are opportunistic to look at inorganic opportunities as well. Absolutely. Cross-border cross-border can be part of that. But cross-border always comes with more complexity. But it's certainly not at the moment our main focus. Thomas I want to just concentrate a bit on Europe. Tell us how the business is and where you're seeing shoots of recovery and where do you want to be concentrating on the continent. So from a macro perspective as I said we expect the recovery in the second half and we see also in terms of pickup in a capital markets more CEO confidence coming through. Even though there is still frustration in some countries including Switzerland about the speed of vaccine programs. But there is an increase in terms of confidence that we can see and hear from our clients. And that itself creates an opportunity both for our private banking business but also for our investment banking business. Tell me about Brexit and how this is impacting you. So we did move some people out of out of London. But on the other hand London continues to be our main hub in terms of investment banking for the whole Europe region including the UK of course and even Switzerland. We do a lot of services in terms of investment banking out of London in terms of private banking. We have our main hub for the eurozone is in Luxembourg. But we also have cooking capabilities in Spain and other other countries and of course in London. So we have to see now how things will develop. There is very close collaboration between Switzerland and the UK because Switzerland obviously is also not part of the EU. And it was very helpful. How important is it for the EU the UK to come up with an agreement about equivalence. I think it's important and it's it's in the interest of both sides because need the London market will continue to be for investment banking at least the key market in Europe. I'm convinced about that. And they will keep that that that status and some of the consequences of Brexit is also that they can be maybe slightly more liberal in terms of some of their regulations. And that's that's gonna be helpful for the industry. So I'm convinced that it's in both parties interests to find the appropriate agreements and mutual recognitions and then we should all move on from there. Just a couple of more questions. Obviously your investment bank. The first two months saw revenues up by about 50 percent. That's a hell of a clip. Can you keep that up. It's actually more than 50 percent. He said it's over 50 percent. And it's really doing very well. I'm extremely satisfied about our operational performance in the first quarter. It's proof that our strategy works clearly. Green cell is a distraction and is something that we're working through now. But the the operational results we had in the first two months showed us that we are on the right path. Any idea of targets to use and with regard to revenues and profits. No. That's too premature to give any guidance on that because there are too many question marks out there around the speed of the overall economic recovery and the vaccine rollout and the macroeconomic situation. But you know we said that mid-term we want to get to 10 to 12 percent in terms of return on tangible equity a midterm that means from 2022 onwards for us. And that's what we're focused on. And that's what we want to deliver.

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Credit Suisse CEO Gottstein on Asia Businesses, Greensill Collapse

Credit Suisse Group Chief Executive Officer Thomas Gottstein discussed the prospects for bank's businesses in Asia. Gottstein also signaled he’d consider further separating the asset-management unit from the rest of the bank after the Greensill Capital collapse. He spoke exclusively with Bloomberg's Rishaad Salamat ahead of the lender's annual Asia Investment Conference. (Source: Bloomberg)

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