Credit Suisse may downsize its Joburg office to cut its cost base
Swiss banking group Credit Suisse may downsize its Johannesburg office, moving some of its operations and professional staff offshore as part of an international effort to cut its cost base.
Senior adviser to Credit Suisse in SA Rick Menell said the driver of the move was the priority Credit Suisse had put on reducing costs in every part of its business. However, Menell said the group remained committed to emerging markets and to Africa. SA remained an important gateway and an "absolutely first-rate finance house", even though some of its SA-related business had already moved offshore.
On Friday, Credit Suisse started consultations with the more than two dozen staffers in its local office with a view to streamlining the operation. This was in line with the "intense effort" by the group to reduce its costs over the past three years since Tidjane Thiam took over as group CEO in July 2015 and set out a plan to deliver 3.5-billion Swiss francs of gross cost savings by the end of 2018.
The group’s offices in UK, Switzerland and the US have seen significant head-count reductions, and it has downsized operations in Canada, Brazil and Russia. But it is expanding in the Far East and is still committed to being one of the top five global equities players, Credit Suisse corporate communications director James Quinn said.
The bank employs 26 professional staff in SA, 21 of which are in its equities business, which is one of the top 10 equities houses in SA, while the rest are investment bankers. Menell said Credit Suisse Securities had been a channel for international investment into SA since it opened its doors in 2010, after the group’s equities joint venture with Standard Bank came to an end.
However, although the size of the office peaked at about 60 staffers four years ago, it has been scaled down since then, with the bank’s South African equities research now done out of London, along with some of its other SA-and Africa-related business, including its private wealth management business.
The Johannesburg-based equities trading business ranks seventh or eighth on the JSE in terms of trading volumes, with a market share of about 5% to 7%, and a client base of mostly foreign buyers of South African equities. However, the group could look to relocate some of that infrastructure to other trading centres, such as London, and will review whether it can serve clients just as well, or even better, with lower costs in the coming weeks.
Menell said the group was continually talking to multinational companies and there had been a shift in sentiment towards SA, and for the first time in three years, "we are seeing serious interest by multinationals in South African companies".