Credit Suisse Gains on Growth in Wealth Management in Asia

| About: Credit Suisse (CS)

Credit Suisse’s (NYSE:CS) wealth management division accounts for about 46% of the $49.17 Trefis price estimate for Credit Suisse’s stock, which is slightly ahead of the current market price. Credit Suisse competes with Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), UBS, and Goldman Sachs (NYSE:GS) in trading, investment banking and asset management services.

Asia Pacific Growth Looks Promising

Asia Pacific is fast becoming an attractive region for wealth management services, driven by the strong economic growth of this region. In a recent Merrill Lynch and Capgemini report, the number of millionaires in the Asia Pacific has increased considerably and is now matching the numbers in Europe and North America.

Credit Suisse seeks to benefit from growing demand for wealth management services in Asia Pacific. Credit Suisse’s wealth management has had a positive start in Asia this year, and if this trend continues, new client money inflow by 2012 could exceed its target of $39 billion. Credit Suisse is Switzerland’s second largest bank and ranks fifth worldwide in wealth management.

Credit Suisse has already added considerable wealth assets or new client money since 2009. This year Credit Suisse expects to add to the 4,200 relationship managers it had at the end of last year, expecting a net increase of 160 relationship managers this year. [1]

Chart created using Trefis' app

Assets under management increased from $440 in 2009 to $485 billion in 2010, and we expect this could grow going forward. As the economic environment recovers, we expect AUM could increase at an average annual growth rate of 3%. However, if the company is able to leverage its strong global wealth management expertise and successfully further its growth initiatives in the Asia Pacific region, there can be an upside to our forecasts.

If the assets under management increase at an average annual growth rate of around 10% during our forecast period, reaching around $675 billion by 2013, there can be an upside of around 10% to our current price estimate.


Notes:

  1. Credit Suisse May Beat Asia Wealth Inflow Goal, Berchtold Says

Disclosure: No positions